‘Irrational tax structure crippling Indian art industry’

March 26th, 2009 - 1:53 pm ICT by IANS  

By Sreya Basu

Kolkata, March 26 (IANS) An “irrational tax structure” is crippling the art industry and the government should slash import and value-added taxes (VAT) on artworks to help the sector flourish, says an industry lobby group.

“The tax structure on artwork is too irrational in India. Even if an art piece is generated by an Indian abroad and he wants to bring it to the country, he is taxed heavily,” Rakhi Sarkar, chairperson of the Committee on Art and Business of Art at the Federation of Indian Chambers of Commerce and Industry (FICCI), told IANS.

The committee was recently set up under the aegis of FICCI and the Kolkata Museum of Modern Art (KMOMA) for promoting art in the country.

Sarkar said at present artworks were listed among the highest luxury items.

“The exact amount of tax that is levied on a Rolls Royce car is levied on a piece of art that comes to the country from abroad,” she said.

Artworks are not luxury but intellectual property like books, Sarkar said, adding: “Then why should one has to pay as high as 12.5 percent VAT and heavy entry taxes? The government should be a little liberal if it really wants to promote art.”

She argued that while many non-resident Indians (NRI) have a good collection of artworks, they avoid bringing these to India due to the prevailing policies on artworks. “And that’s the reason why all good artworks are going to America, where there is no entry tax,” she said.

The committee has already initiated talks with the central government on revising the tax structure.

“We are already in talks with the finance ministry and within a few months will submit a list of suggestions on this aspect. We will suggest reduction of VAT to one percent and also a major cut in the import tax,” Sarkar said.

The committee will also make suggestions on funding and management of museums, apart from deciding on the course and curriculum of art institutes.

(Sreya Basu can be contacted at sreya.b@ians.in)

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