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Cigarettes firms slip on cess hike speculations; ITC down 3%

Godfrey Phillips and VST Industries also slipped 1.8% and 1.3%, respectively

SI Reporter  |  New Delhi 

A man talks on his mobile phone as he walks past an ITC office building in Kolkata. Photo: Reuters
A man talks on his mobile phone as he walks past an ITC office building in Kolkata. Photo: Reuters

Shares of cigarettes companies such as ITC, and slipped up to nearly 3% on Monday following the buzz that the may consider hiking the compensation on cigarettes if prices come down post the implementation of the Goods and Services Tax (GST).

The will meet later today to take stock of the implementation of the new indirect tax regime.   

Reacting to the buzz, hit an intraday low of Rs 327, down 2.9% on the BSE in an otherwise strong market. The stock was the leading loser on Sensex.

and also slipped 1.8% and 1.3%, respectively on the BSE.

The government had recently notified that the cigarettes will be exempted of additional excise duty under the GST regime. The move triggered a sharp spurt in the stocks of cigarette firms with crossing the Rs 4 lakh crore market capitalisation earlier in July. However, speculations are abuzz that instead of an additional excise duty, the government may increase the on the demerit good.

Under GST, cigarettes have been put under the highest tax slab of 28% along with an additional 5% and another based on varying length of the cigarettes.

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