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‘High taxes have kept away art collectors who will now embrace the new GST.’
IMAGE: An exhibition of Lata Mangeshkar paintings at Bharat Bhavan in Bhopal. Photograph: ANI Photo
With the revised slabs of the goods and services tax (GST) taking effect on September 22, India’s art world was among those who welcomed the rate cut.
GST on art and cultural goods has been reduced from 12 per cent to 5 per cent, a move that could spark a new phase of growth in collecting, broaden the buyer base, and further boost momentum in an already buoyant market, says the industry.
“All art, irrespective of the materials used in its making, is now levied a 5 per cent GST,” says Ashish Anand, CEO and MD, DAG (formerly Delhi Art Gallery), describing the GST cut as a game-changer.
“Art can never occur in a vacuum, and requires patrons. High taxes have kept away collectors who will now embrace the new GST,” he says.
With interest in Indian art already surging, he is confident that “we are entering a golden era of collecting and patronage”.
When artworks by modern masters or contemporary artists change hands for tens of crores of rupees, GST is generally levied over and above the hammer price, says Manoj Mansukhani, director of marketing at AstaGuru Auction House.
For buyers, that meant the cost of acquiring works was significantly higher. With the new rate, that burden has eased.
“This is expected to boost liquidity, bring more works into circulation, and encourage broader participation from collectors,” Mansukhani says.
India’s art market has shown steady growth in recent years, emerging stronger from the disruptions of the pandemic.
After a period of consolidation, sales volumes and values rose, with the art market clocking a turnover of $144.3 million (about Rs 1,253 crore/Rs 12.53 billion) in 2023, according to the State of the Indian Art Market Report FY23 by Grant Thornton Bharat and Indian Art Investor.
Artist after artist, whether it is Amrita Sher-Gil or Tyeb Mehta, has set new benchmarks, both for themselves and Indian art.
This year, a new record was set for modern Indian art, with M F Husain’s painting, Gram Yatra, selling for over Rs 118 crore (Rs 1.18 billion).
Enter the young collector
Market reports place overall sales in the low hundreds of millions of dollars, with the most robust growth occurring in the Rs 5-25 lakh bracket — a segment increasingly favoured by younger and first-time collectors.
“The past three years have seen steady momentum,” says Mansukhani.
“For 2025, expectations are upbeat, supported by digital platforms, increasing domestic wealth, and now the reduced GST rate, which could act as an additional catalyst.”
Anand points out that interest in art has spread well beyond established metropolitan hubs.
“We see collectors coming from smaller cities and towns now, and the excitement to explore and own works of art in the younger generations has been exploding,” he says.
India, he adds, is being seen as a beacon of light in the current environment and seems to be emerging as the powerhouse for the global art market.
Both auction houses and galleries believe the tax cut will play a vital role in widening the collector base, particularly among younger buyers.
“With the GST cut lowering the entry cost, it becomes easier for first-time buyers to justify their first acquisition, potentially enlarging the base of India’s collector community,” Mansukhani says.
Anand agrees. The GST cut provides a strong boost for collectors at a time when prices for art are already rising and becoming stronger by the year, he says.
“It could provide the catalytic thrust that will unleash the so-called animal spirit among collectors.”
The mechanics of taxation
For buyers within India, the revised GST rate applies across the board — whether the acquisition is through galleries, auction houses, or art fairs, and regardless of medium, be it painting, sculpture, or textile-based work.
In galleries, the tax is levied directly on the price of the artwork. At auction houses, the calculation is more layered.
In addition to GST on the artwork, buyers also pay a buyer’s premium (which varies across houses) and GST on that premium for services rendered.
For international buyers, the impact is limited.
“GST is a tax charged by the Indian government on sale of goods and services in India,” Anand clarifies.
“While the GST rate cut would impact prices for art collectors and gallerists in India, the same would not affect buyers based out of India since each country has its own tax regulations.”
The announcement, say industry insiders, has triggered heightened interest from collectors.
“Auction houses have been receiving queries from clients keen to understand how the revised rates affect their invoices,” says Mansukhani.
The shift has sparked renewed interest, with many collectors considering purchases they might earlier have deferred, he adds.
At DAG, the mood is similar. “Naturally, there is enthusiasm, and conversations around the rate cut are swamping our relationship managers,” Anand says.
While trophy sales at the very top of the market may remain largely unaffected, industry leaders believe the broader ecosystem will see a tangible impact, with artists themselves standing to benefit from the deeper pool of buyers.
Feature Presentation: Aslam Hunani/Rediff
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