Handset manufacturer, Nokia India strongly opposed the move by Maharashtra government to increase VAT on mobile handsets from 4 % to 12.5 %. It said that the move is a self defeating move bound to reverse the growth of the industry, thereby impacting the socio-economic development of the state.

Vipul Sabharwal, Director Sales, Nokia India said, "The move by the Maharashtra government to hike the VAT on mobile cellular handsets from 4% to 12.5%, is not just very distressing for the industry, but is also a very shortsighted move. The mobile industry is a fast growing segment, which contributes significantly to the GDP of the nation as well. This is a self defeating move, bound to reverse the growth of the industry, thereby impacting the socio-economic development of the state as well. “

Providing more reasoning to its logic, Nokia cited that Maharashtra clocks on an average one million sales of handset units every month resulting in a turnover of Rs 300 crore at average selling price of $ 60. With 12.5 % VAT government will earn Rs 36 crore from the current figures of Rs 12 crore. But with the increase in VAT, sales will decline drastically. Nokia said there is a possibility that sales may drop to Rs 30 crore every month resulting in the government being at a loss.

It fears that the move will lead to resurgence of the grey market in the state.