Mobile phone prices go up in Maharashtra

Most Commented

Unified Communication for your Biz

Improve your contact center performance. See how you can make a difference.

Watch Now

Reach the ICT Community

Engage and build your ICT audience with CIOL online advertising.

Know more

Mobile phone prices go up in Maharashtra

Retail sales of mobile phones and other products highly affected by Maharashtra Government's hike in VAT

CMN Correspondent

Friday, July 03, 2009

Email This

Print This

Comments

RSS

MUMBAI, INDIA: Finally, the State Government of Maharashtra has hiked the value added tax (VAT) on mobile handsets, completely overlooked its impact on retail business and the consumers. The government raised the VAT from 4 to 12.5 per cent, which has pushed up handsets prices at all retail stores, company outlets and shops.

Following the move, the industry has reacted sharply and opposed this decision. According to Vipul Sabharwal, Nokia India's director - Sales, the Maharashtra Government's move to hike the VAT on mobile handsets is not just very distressing for the industry, but is also a very short-sighted move.

"The mobile industry is a fast growing segment, which contributes significantly to the nation's GDP. This is a self-defeating move, bound to reverse the industry's growth, thereby impacting the state's socio-economic development," reacts Sabharwal.

In Mumbai alone, the company has about 40 Nokia branded outlets and stores.

The industry fears that hike in the VAT will lead to grey marketing of mobile phones.

Sabharwal says this would affect the organized business and trade along with impacting employment and encouraging unethical practices.

According to Rajiv Agrawal, CEO, Mobile Store, an Essar Group entity, it is not a great thing for the consumers to pay more than their counterparts in other states.

"It will lead to grey marketing, where products are sold at cheaper prices but without proper bills and no services," he says.

"On one side there's high stress in taking mobility to rural areas and increasing mobile penetration, such move can create major setback. The 8.5 per cent hike in addition to the 5 per cent octroi tax adds about 13.5 per cent to the cost of handsets and mobile products. This means that people in the state are paying 13.5 per cent more compared to other states," Agrawal comments.

Following the state government's decision, past few days many retails stores and shops in Mumbai and across the state had remained closed to mark their protest.

According to industry estimates, the mobile handsets sale in Maharashtra at present stands at one million units per month today, which translates into a turnover of Rs. 300 crore per month, at an average selling price of US$60.

Would you like to on this article?

Be first to comment on this article

Name
Email
Your reply

China wooing Indian IT companies

Intuit Money Manager set to make India debut

Is China speaking English to beat Indian IT?

Obama visit arouses mistrust among China netizens

I have never used Twitter: Obama

Chandigarh cyber cafes raided

Product recall will strengthen brand Nokia

Mobile number portability from Dec 31

Delta launches new UPS series 'NH Plus'

Facebook grew by 1,840 p.c in a year

	Simplify Business Management. ERP solutions by IBM
	Carry your Dream, Convey your Value with ZTE
	A fault tolerant server to reduce your TCO

	A must attend event for IT Professionals
	How to make your enterprise productive
	Unified Communication can impact business. Know how

	Making Web3.0 a Reality!
	CIOL Enterprise Next :What's NEXT in IT? :
	Decrease Total System Costs With Cyclone IV FPGAs

	Reach your desired Target Audience and realize high ROI
	Effective ways of Customer Acquisition through Demand Generation
	Reach 2,500 potential Enterprise Customers!