We’ve reported on India’s continuing struggle against illegal mobile activity. “Grey market” devices with no ID code have been an on-going problem in the country. And a recent 12.5% VAT hike on mobile devices in the Western Indian state of Maharashtra has driven legal mobile sales down by 75%
According to the Indian Cellular Association (ICA), sales of mobile devices in Maharashtra have dropped 75% between the start of June and July. This follows a tripling of the VAT charged on mobile phones. The monthly sales of mobile devices in that region is usually around 1 million units. The ICA claims this figure will drop by up to 80% if the new VAT is not removed.
From the report:
Pankaj Mohindroo, National President, ICA: “The three fold hike in the tax burden can only result in a complete lose-lose situation for all stakeholders. The dismal sales records of the first ten days show that the grey market is back with a vengeance.”
What we think?
India has had repeated problems with mobile crimes, from spam to illegal imports. If there’s such a thriving market for illegal phones in the country, I’m not sure why the powers that be in Maharashtra thought a massive tax increase would be a good idea in the first place.