Excise Duty Hike Sends Tobacco Stocks Tumbling

Shares of major tobacco and cigarette makers such as ITC, Godfrey Phillips, and VST Industries fell sharply following the Indian government's decision to impose an additional excise duty on these products effective February 1. The changes form part of amendments to the Central Excise Act.

In a recent financial shake-up, stocks of prominent tobacco producers, ITC, Godfrey Phillips, and VST Industries, witnessed a significant drop after the government's announcement of an increased excise duty.

ITC's shares plunged by 5.11%, reaching their 52-week low at Rs 345.35. Shares of Godfrey Phillips India fell by 4.58% to Rs 2,184.60, while VST Industries saw a decline of 2.56% to Rs 248.60.

The additional excise duty, applicable from February 1, forms part of a revised tax regime, with the Central Excise Act imposing Rs 2,050-8,500 per 1,000 cigarette sticks, based on length. This is over and above a 40% GST.

(With inputs from agencies.)