To express their solidarity, around 5,000 traders from all over Maharashtra including Mumbai, Pune, Jalgaon, Nashik and Nagpur congregated in Mumbai on Thursday under the aegis of the Maharashtra Mobile Trade Association to protest against the VAT hike from four per cent to 12.5 per cent.
The delegation, comprising over 5,000 retailers, marched from the JJ flyover in the city to the VAT Commissioners office located at Mazgoan. Later on, they handed over a memorandum to the Commissioner's office.
The trade has started feeling the pinch of the hike and sales has dropped considerably within a week. The revised rates of 12.5 per cent came into effect from July 1, Maharashtra Mobile Trade Association (MMTA) President, Tushar Avalani, said in a statement.
In a short period of a week, sales in Mumbai alone have dropped by 60 per cent and it is expected to drop further as grey material starts flowing in more aggressively.
"We urge the government to review its decision immediately (to hike VAT)," Avalani said.
MMTA feels that the higher handset prices would lead to the resurgence of the grey market, eventually resulting in losses to the exchequer to the tune of almost Rs 100-crore per annum by way of VAT and at least Rs 75 crore (R 750 million) per annum by way of octroi.
MMTA also pointed out that all other states in India, are at four per cent VAT, other than Uttar Pradesh which is at 4.5 per cent.
"This will clearly make mobiles in Maharashtra most expensive in India. This 8.5 per cent difference is more than the combined margins of distributors and retailers, facilitating easy flow of handsets from the rest of the country," MMTA said. The MMTA is a body that represents the organised mobile trade in the state.
"We have over 4,000 members today and their fate is in the hands of the state government now. This move by the government directly impacts 25,000 retailers and indirectly will have an adverse effect on the lives of 1,50,000 people, including their families. We will continue with our protests across the state and collectively oppose this move," Avalani said.
