GST Hike Sinks Shares of Sin Goods

Shares of ITC, VST Industries, and Varun Beverages fell after the GST rate on sin goods was proposed to be increased from 28% to 35%. The GoM's proposal will be discussed by the GST Council on December 21, with a final decision to be made thereafter.

Shares of ITC, VST Industries, and Varun Beverages saw a decline in morning trading on Tuesday, following a proposal by the Group of Ministers (GoM) to increase the GST rate on sin goods. The current rate of 28% is set to rise to 35%, impacting categories like aerated beverages and tobacco products.

ITC's stock dropped by 3%, bringing its price down to Rs 462.80 on the Bombay Stock Exchange (BSE). Similarly, VST Industries experienced a 2.27% decline, with shares priced at Rs 318.30. Varun Beverages faced the steepest fall, with shares tumbling 5.18% to Rs 600.

The GoM's report is slated for discussion by the GST Council on December 21. Chaired by the Union Finance Minister and comprising state finance counterparts, the council will make the final decision on the proposed GST rate adjustments. The proposal includes maintaining the current four-tier tax structure of 5%, 12%, 18%, and 28%, while introducing a new special rate of 35% for the specified sin goods.

(With inputs from agencies.)