ITC shares fall and then recover after government hikes cigarette taxes - do investors need to panic?
Budget 2023 Cigarette Tax: ITC shares made their way back into the green after the governments announcement of higher taxes on cigarettes triggered an initial knee-jerk reaction in the stock. Heres how other cigarette-related stocks - such as Godfrey Phillips and VST Industries - fared.
Budget 2023: ITC shares staged wild swings on Wednesday after Finance Minister Nirmala Sitharaman announced higher taxes on cigarettes in the Union Budget 2023-24.
In her Budget speech, the finance minister announced a hike in the National Calamity Cintingent Duty (NCCD) on cigarettes — or taxes on cigarettes — by 16 per cent. This is the first increase in the NCCD on cigarettes since the Union Budget for the financial year 2020-21, in which the government had raised the duty by 2-4 times.
The NCCD on specified cigarettes was last revised three years ago.
Here's a look at the changes in the taxes applicable to cigarettes across categories:
Description | Excise duty rate (in rupees per 1,000 sticks) | |
From | To | |
Other than filter cigarettes, of length not exceeding 65 mm | 200 | 230 |
Other than filter cigarettes, of length exceeding 65 mm but not exceeding 70 mm | 250 | 290 |
Filter cigarettes of length not exceeding 65 mm | 440 | 510 |
Filter cigarettes of length exceeding 65 mm but not exceeding 70 mm | 440 | 510 |
Filter cigarettes of length exceeding 70 mm but not exceeding 75 mm | 545 | 630 |
Other cigarettes | 735 | 850 |
Cigarettes of tobacco substitutes | 600 | 690 |
(Source: Budget 2023-24) |
The stock made its way back into the green zone after an initial knee-jerk reaction to the news, finishing the day with a gain of Rs 9.2 or 2.6 per cent at Rs 361.5 apiece with high volumes on BSE. As many as 27.5 lakh ITC shares changed hands during the session, more than six times its daily average in the past two weeks, according to provisional exchange data. latest stock market action and Budget 2023 highlights on Zeebiz.com
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