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VAT on phones
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The move by the Maharashtra state government to hike VAT value added taxes on mobile cellular handsets has caught phone manufacturers and handset traders by surprise. The industry believes that the move will not increase the revenues for the government as intended because the legal sales of handsets will drop in a big way.

Mobile handset traders are calling it a do or die situation in Maharashtra. The state's Mobile Trade Association is planning to shut shop till the government rolls back the hike in VAT, or value added taxes from 12.5% back to 4%.

With Nokia having the biggest market share, its dealers were the first to react, There are 6 Nokia distributors in Mumbai each having 1000 retailers under them and 50 priority dealers. Each store makes about Rs 30-50 lakh per month. The proposed hike in VAT will reduce that to less than Rs 10 lakh.

Consumers are not happy either.

It looks like the stand-off with the govt will continue as the very livelihoods of a large number of people are at stake.
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