Free Press Journal

ITC settles nearly 2% down on fears of excise duty hike


New Delhi: Shares of FMCG major ITC today settled 1.72 per cent down in an otherwise positive market as expectations are rife that the government is likely to hike excise duty on tobacco products in the forthcoming Budget.

According to various brokerage firms, governments has been invariably increasing excise duties on tobacco products in Budgets over the past few years and this trend is likely to continue this year as well.

“In the upcoming Budget, the industry is expecting just a marginal hike in excise duty on cigarettes…,” Angel Broking said in a research note. The stock today opened on a weak note on the BSE at Rs 304. It then slumped 3.67 per cent and fell to an intra-day low of Rs 293.65. At the end of today’s trade the stock was quoted at Rs 299.60, down 1.72 per cent.

On the NSE also, similar movement was seen as the stock opened at Rs 302.65, then fell 3.66 per cent to an intra-day low of Rs 293.40 and finally settled for the day at Rs 299.85, down 1.54 per cent.

Meanwhile, seeking to reduce tobacco consumption in the country, a study commissioned by Health Ministry and WHO today recommended increasing tax on all types of tobacco products and withdrawal of tax exemption to ‘bidi’ manufacturers.

The tobacco industry, however, termed as “motivated” the recent study, which had found tobacco products cheaper than essential food items, saying it was an attempt by anti-tobacco activists to “influence” policy-makers on the taxation issue during the forthcoming Budget Session.

Meanwhile, the broader market settled in the positive territory with the 30-share benchmark index Sensex ending 79.64 points higher at 23,788.79.