I just recently lost my Sony phone and as gearing up (actually saving oney) to join the so-called the “touch generation” by purchasing the latest smartphone. But it seems like I will be smuggling my next mobile phone or atleast making a visit to any nearing state to make a purchase. WHY? Well the Maharashtra government has decided to hike VAT (value-added tax) on mobile phones by 8.5% indirectly increasing the prices of these communication wonders.

The rates came into effect on Wednesday and has received a bad response from both, retailers and customers. In fact retail chains like The Mobile Store (TMS) and Nokia outlest protested the move by shutting shop for three hours.

Ironically Maharashtra is th only state that ould levy the VAT.The objective is to raise the monthly VAT revenues by Rs 36 from its current Rs 12 crore. The donside of this:

- Massive drop in mobile sales
- Increased grey market activity, even from neighbouring states
- Less footfalls in major retail chains like TMS, Croma etc.
Analysts and industry professionals see a drop to Rs 30 crore from the current Rs 300 crore (with an average of 3000 per unit).  Plus it ill affect over 20, 000 retailers and 450 distributers in Maharashtra. This surely will have its on repercussions but should really work well for the governments cash registers.

We welcome your views about the governments latest move.  Your opinions really matter …