Hyderabad, December 28: Mobile phones in Telangana are set to become cheaper as the state has cut the VAT on handsets from 14.5 percent to 5 percent.
The state assembly today unanimously passed a bill, amending the VAT Act.
Commercial taxes minister T. Srinivas Yadav, who moved the bill, said the tax cut will provide relief to the consumers.
With this, Telangana has joined neighboring Andhra Pradesh, Tamil Nadu and Karnataka in reducing VAT on cellphones to 5 percent.
VAT on cellphones was made 5 per cent a month before bifurcation of Andhra Pradesh in June 2014. While AP continued with the same, the TS Commercial Taxes department reversed it to 14.5 per cent again.
However, this led to widespread confusion with a few shops charging 5 per cent like before while priority dealers charged 14.5 per cent. Also, it led to grey market operations where phones were sold without bills and at discounted prices.
Sellers were even smuggling phones from Vijayawada and selling them at a higher price in parts of the state like Khammam and Nalgonda districts.