We are buying painting from artists without GST invoice and selling it to retailer under GST invoice,.Painting is treated as Corp Gift item.
Is the above procedure legally OK or any loose point? Please guide.
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GST Invoicing of artists painting
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| Here is the complete GST position for artists selling their original paintings: 1. GST Exemption on Original Art: As per Notification 02/2017-IT(Rate), Schedule I, Entry 99 — original paintings, drawings, pastels, and other original artworks produced by artists are EXEMPT from GST (HSN 9701). This applies to original handmade artworks, not prints/copies. 2. Prints/Copies/Reproductions: If an artist sells prints, posters, or reproductions of their paintings, these are NOT exempt. GST @ 12% applies (HSN 4911). 3. If Turnover Exceeds Rs. 20 Lakh: Even though supply is exempt, if aggregate turnover (including exempt + taxable) exceeds Rs. 20 lakh, GST registration may still be required. However, since the supply of original artworks is exempt, no GST is collected on those sales. 4. Invoice for Exempt Supply: Even for exempt supplies, if registered, the artist must issue a 'Bill of Supply' (not a Tax Invoice) clearly mentioning the HSN 9701 and 'Exempt Supply.' 5. Services by Artist (Performance, Teaching): If the artist also renders services (art classes, live performances), those services are taxable at applicable rates (18% for most professional/educational services to non-government bodies). 6. ITC: Since the core supply (original paintings) is exempt, ITC on inputs used for making those paintings cannot be availed — reversal of ITC on inputs attributable to exempt supplies is required under Rule 42. |
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