Cigarette stocks were under pressure after the government stepped up NCCD (National Calamity Contingent Duty) duty on cigarettes by about 16%.
Godfrey Phillips India (down 5.31%), VST Industries (down 2.40%) and Golden Tobacco (down 1.38%) tumbled.Finance Minister Nirmala Sitharaman in her Union Budget announcement today said the National Calamity Contingent Duty (NCCD) on specified cigarettes is proposed to be revised upwards by about 16%.
The NCCD on specified cigarettes was last revised three years ago, the FM said while addressing the Parliament.
Cigarette major ITC slumped as much as 6.6% in intraday. It later bounced 2.61% to settle at Rs 361.45. The media reported that the impact of NCCD on the overall volumes of the company is expected to be limited.
According to a domestic brokerage, the net tax on cigarettes would require a 1-3% hike in the prices of cigarettes across different categories. The hike in taxes is not very high and would be easily passed on by small increases (1-3%) in prices, the brokerage reportedly said.
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