Used paintings are classifiable under heading 9701 and taxable at 12%: AAR

Case Details: Authority for Advance Rulings, Maharashtra Saffron Art (P.) Ltd., In re - [2022] 139 taxmann.com 269 (AAR-MAHARASHTRA)

Judiciary and Counsel Details

• • Rajiv Magoo & T.R. Ramnani, Member

Facts of the Case

The applicant was involved in procuring paintings and selling the same by auction. It filed an application for advance ruling to determine classification of second-hand or used paintings and their taxability under GST.

AAR Held

The Authority for Advance Ruling observed that as per Rule 32(5) of CGST Rules, the tax shall be payable on the difference of selling price and purchase price in case of second hand goods. In the instant case, the applicant was dealing in second hand paintings or used painting and therefore, provisions of Rule 32(5) would be applicable to the applicant in case of second hand goods. The paintings would fall under heading 9701 and taxable at 12% under GST as per entry at Sl. No. 236 of Notification No. 1/2017-Central Tax (Rate). Thus, the applicant would be liable to pay GST at 12% on difference between purchase price and selling price of paintings.