ITC Hits 52-Week Low As Tobacco Stocks Plunge On New Excise Duty Hike
Shares of ITC, Godfrey Phillips, and VST Industries fell sharply on Friday, extending losses after the government imposed additional excise duty of Rs 2,050-8,500 per 1,000 cigarettes from February 1, over and above 40% GST. ITC dropped 5.11% to Rs 345.35 (52-week low), Godfrey Phillips 4.58% to Rs 2,184.60, and VST 2.56% to Rs 248.60. A new cess has also been notified for pan masala firms.
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New Delhi: Shares of cigarette and tobacco product makers ITC, Godfrey Phillips and VST Industries dropped on Friday morning, extending their previous day's decline, after the government imposed an additional excise duty on such products effective February 1. ITC's stock tumbled 5.11 per cent to Rs 345.35 -- its 52-week low -- on the BSE.
The stock of Godfrey Phillips India declined 4.58 per cent to Rs 2,184.60. Shares of VST Industries also dipped by 2.56 per cent to Rs 248.60. On Thursday, Godfrey Phillips India tanked 17.09 per cent to settle at Rs 2,289.65 on the BSE. Shares of ITC tumbled 9.69 per cent to end at Rs 363.95 and VST Industries dipped 0.60 per cent to Rs 255.15.
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The finance ministry has notified amendments to the Central Excise Act imposing an excise duty of Rs 2,050-8,500 per 1,000 sticks based on cigarette length, effective February 1. This duty will be over and above 40 per cent GST. The ministry has also notified the Health and National Security Cess Act, levying cess on the manufacturing capacity of pan masala-related businesses from February 1.
The total tax incidence on pan masala, after taking into account 40 per cent GST, will be retained at the current level of 88 per cent. The revised tax structure replaces the existing regime of 28 per cent GST, along with a compensation cess on tobacco and related products.
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