Nokia global CEO meets PM; seeks uniform VAT on handsets

World's largest cellphone maker Nokia's global CEO Olli-Pekka Kallasvuo today met Prime Minister Manmohan Singh and discussed various issues and sought uniform tax on mobile handsets across the country.

The handset makers have raised concerns over different rates of Value Added Tax (VAT) being levied by states. While across the country a four per cent VAT is levied on mobile handsets, Maharashtra and Madhya Pradesh have increased the rate to 12.5 per cent.

The Finnish firm, along with other handset makers, has been arguing that higher VAT rate is likely to encourage grey market. Nokia said it may also hamper states' revenues as customers in Maharashtra and Madhya Pradesh would tend to buy phones from neighboring states offering lower VAT rate.

During his 45-minute long meeting with the PM, Kallasvuo also discussed many initiatives taken by Nokia to make mobile telephony affordable in rural areas with schemes like micro finance and introduction of Nokia Life Tools (NLT) targeted at the rural masses, a Nokia spokesperson told PTI.

Nokia has come up with a new attractive micro-financing scheme for rural customers which will enable buyers to pay for their phone in 25 equal weekly installments of Rs 100 each.

Kallasvuo complimented the government for its forward looking policies in the past few years which has resulted in explosive growth in the Indian telecom sector.