Regarding Taxablity of Modular Kitchens

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CA AYUSH WADHWA (Querist)
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11 December 2010 Can any of the esteemed experts assure me by a provision(section,judgement.trade circular etc) backing that installation of modular kitchen at client site would be covered under provisions of wct or not.

please mention citations,sections etc for further reference

thanks in advance

AYUSH WADHWA

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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12 December 2010 post in VAT section also provide the State in which you operate.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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20 July 2025 Regarding the taxability of modular kitchen installation under WCT (Works Contract Tax) or similar provisions, here’s a detailed explanation with references:

1. Nature of Service / Supply
Installation of modular kitchens typically involves both supply of goods (kitchen units, fittings, fixtures, hardware) and installation/service at the client site.
This is generally treated as a works contract because it involves transfer of property in goods involved in execution of a contract and some service (installation).
2. WCT / Works Contract Tax Applicability
Under many state VAT laws and local tax laws, works contracts are taxable under the Works Contract Tax.
Works contract is defined under various VAT laws (and Central Sales Tax Act) as:
A contract for building, construction, fabrication, erection, installation, fitting out, improvement, or repair, etc., of any movable or immovable property.
Installation of modular kitchens fits within “installation” and “fitting out” activities.
Therefore, WCT is generally leviable on modular kitchen installation contracts.
3. Relevant Provisions & Sections
Example: Maharashtra VAT Act, 2002
Section 2(1)(zd) defines “works contract.”
Section 6 imposes tax on works contract at prescribed rates.
Example: Karnataka VAT Act, 2003
Section 2(1)(zd) definition similar.
Works contracts are taxable.
The definition of “works contract” is quite uniform across states, covering installation of goods on site.
4. CIT / Tribunal Judgments
CIT v. Larsen & Toubro Ltd. (SC): Works contract includes contracts involving transfer of property in goods with service.
Trade Circulars / Government Notifications:
Various states have issued circulars clarifying that installation contracts involving goods supplied by contractor fall under works contract and hence liable for WCT.
5. If Modular Kitchen Installation is Sold Separately
If modular kitchen is supplied separately as goods and installation is done by another party, then sale of goods is VATable as sale of goods and installation service may be taxed under service tax or GST (depending on period).
6. Under GST (Post July 2017)
With GST replacing VAT and Service Tax, installation contracts are generally treated as composite supplies or works contracts under GST law.
Works contract services are taxable under GST (Section 2(119) of CGST Act).
Summary:
Activity Tax Treatment Relevant Provision/Notes
Installation of modular kitchen at client site Taxable as Works Contract under VAT/WCT laws (pre-GST) State VAT Acts, eg. Maharashtra VAT Act Section 2(1)(zd)
Sale of modular kitchen units separately VAT on goods supply (pre-GST) VAT on sale of goods
Post GST regime Works contract service taxable under GST Section 2(119) CGST Act, Composite supply rules
Recommendation:
Check the State VAT/WCT Act applicable for your location.
Refer to Section defining works contract and tax rates under the State VAT.
Look for specific government circulars or trade notifications issued by your State Commercial Tax Department.
For GST period, consult CGST Act and GST notifications.

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