Clarification on issues regarding treatment of supply by an artist in various States and supply of goods by artists from galleries.

Circular No.: 22/22/2017-GST
Date of Circular: 21st December 2017
Relevant Sections and Rules:

• Central GST Act, 2017:
  • Section 168(1): Power to issue instructions for uniformity
• Integrated GST Act, 2017:
  • Section 5: Levy of IGST on inter-State supplies
• CGST Rules, 2017:
  • Rule 55(1)(c): Delivery challan for non-supply movement
  • Rule 55(3): Declaration in e-way bill
  • Rule 55(4): Tax invoice on delivery

Summary of Circular:

This circular clarifies the GST treatment of art works supplied by artists across States and through art galleries, addressing confusion raised by stakeholders.

1. Movement of Art Works on Approval Basis:
   • Artists may send art works (not yet sold) to other States or locations (e.g., galleries) using a delivery challan, not an invoice.
   • As per Rule 55, an e-way bill must be generated if applicable.
   • Tax invoice should be issued only at the time of actual sale/supply, not during initial transport.
2. Nature of Inter-State Supply:
   • If the final buyer is in a different State from the artist, it is treated as an inter-State supply, and IGST will be applicable under Section 5 of the IGST Act.
3. Supply through Art Galleries:
   • When art works are sent to galleries for display, there is no consideration involved, hence no supply at that stage.
   • GST liability arises only when a buyer selects and purchases an art piece from the gallery.
   • The artist issues the tax invoice at the time of actual sale to the buyer.

Source: Circular No.: 22/22/2017-GST