By Admin 
On the very first day of the new year, a sharp decline was seen in Tobacco stocks in the stock market. ITC shares fell by about 8.2% to ₹370, while Godfrey Phillips’ stock fell by about 16%.
The biggest reason for this decline is the central government’s big decision on cigarette tax. According to the official notification issued by the Finance Ministry, the government has increased the excise duty on cigarettes. Now excise duty will range from ₹ 2,050 to ₹ 8,500 per thousand sticks depending on the length of the cigarette. This new rule will come into effect from February 1 and will be imposed on top of the existing 28% GST and other cesses, which will significantly increase the total tax burden.
It is estimated that companies will pass this burden on consumers, due to which the price of a cigarette may increase by ₹ 2–3.
With this, the effective GST rate on tobacco and pan masala products will be around 40%. During this period, about 4 crore shares of ITC were sold in a block deal at an average price of ₹ 400, whose total value was ₹ 1,614.5 crore. This step of the government is being considered as part of the strategy to increase revenue and control sin goods.