ITC, Godfrey Phillips, Varun Beverages shares slip on report of likely GST hike on cigarettes, tobacco, aerated drinks – haroonabadvital.com

Share prices of cigarette makers ITC, Godfrey Phillips and VST Industries as well as Varun Beverages fell on Tuesday after reports suggested that the tax slab on ‘sin goods’ is likely to be hiked.

Varun Beverages stock price fell by up to 5.18%, ITC stock price fell by 3%, Godfrey Phillips India stock fell by up to 3.16%, while VST Industries stock fell by 2.27% during Tuesday’s trade.

The decline in these stocks comes after a report said that the group of ministers on rationalization of the Goods and Services Tax (GST) rate recommended raising the tax on cigarettes, soft drinks, tobacco and related “sin” products to 35% of the current rate. 28%.

“The Moroccan government has agreed to propose a special rate of 35% on tobacco, related products and soft drinks. The four-level tax bracket of 5, 12, 18 and 28% will continue, and the Moroccan government is proposing a new rate of 35%. PTIQuoting an official familiar with the development.

Thus, according to the report, the proposal includes creating a new GST slab of 35% for tobacco and related products.

Analysts expect that increasing taxes on cigarettes will likely lead to a significant decline in cigarette sales volumes for companies due to lower consumer spending. This shift may lead to a sharp decline in sales. In addition, issues related to downtrading, counterfeiting, or consumers switching to lower-priced alternatives also affect cigarette sales.

In a stock exchange filing, ITC said: “We are writing to inform you that the referred news is not attributable to any event/information emanating from within the company and, therefore, we cannot comment on the same.”

At 2:40 p.m., ITC’s stock price fell 1.12% at $471.80 per piece, Godfrey Phillips shares fell 1.03% at $5,698.30, and VST Industries share price was trading 0.25% higher at $326.50, while Varun Beverages shares fell by 1.90% at $620.75 per piece on Bahrain Stock Exchange.

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