Heavy taxes hit art business

The financial meltdown and heavy taxes on works of art imported or sold in India has caused many art galleries to shut down in recent times.

Speaking on the sidelines of the international symposium in museums of the future in Kolkata, Ashok Vajpeyi, chairman of the Lalit Kala Academi, said, "Sales are down in many of leading art galleries across the country because of the ongoing financial crisis. A few of the galleries have not been able to sell anything for months now and many even have been forced to shut down. To add to their woes, the 12.5 percent sales tax levied on every art piece or architecture sold in the country, and the high import duty on all art items imported, is beyond rationalisation."

Leading art gallery chain Bodhi Art was forced to shut down its Delhi, Berlin and London outlets. Its Mumbai studio is the only one functional right now, Vajpeyi pointed out.

"There is a need for a firm policy and a separate tax slab for art and culture items as given to books," Vajpeyi added.

A special committee formed under the aegis of Kolkata Museum of Modern Art (KMOMA) and the Federation of Indian Chambers of Commerce and Industry (FICCI), is in the process of drafting a comprehensive list of suggestions related to tax exemptions for work of art, funding and management of musuems, course and curriculum of art institutes, faculty and infrastructure which will be forwarded to the ministry of finance (MoF) and ministry of culture (MoC) within a month or two, said Rakhi Sarkar, chairperson, FICCI committee on Art and Business of Art and managing trustee, KMOMA,  and spouse of the Anandabazaar Patrika newspaper group co-owner Aveek Sarkar.

"The problem with India is the tax structure levied on art items. An art work of an indian artist imported to India is taxed in the highest luxury tax category almost equivalent to a Rolls Royce. There is no art and culture policy because of which everything is ad hoc. KMOMA in association with FICCI is trying to work with the government to initiate the policy. We are working on a list of comprehensive suggestions which we will hand
over to MoF and MoC within a few months," said Sarkar.

The association will lobby for reduction of VAT or sales tax from 12.5 percent on art items to One percent, relaxation of the heavy import duty structure, seperate tax structure for art and culture items one of the lowest bracket for imported items to help this industry survive.

This apart, KMOMA and Lalit Kala Academi are in talks with various state governments on issues related to the dismal state of conditions of the musuems, management and governance structure, funds and faculty.

"There is a terrible paucity of funds and lack of any professional curators leading to the dismal state of our museums which are storehouse of wealth. We are suggesting that the state government's undertake renewable package with the support of MoC, set up separate museums for modern contemporary art either on its own or PPP route and give tax breaks to them," added Vajpeyi.