Shares of cigarette makers declined by 1.08% to 4.7% following media reports that the GST Council may raise taxes on cigarettes and other tobacco products.
Godfrey Philips India (down 4.71%), VST Industries (down 3.34%) and ITC (down 1.08%) declined.Media reports suggest the government may increase the GST on cigarettes and other tobacco products once the compensation cess ends. Currently, these products, classified as "sin goods," are taxed at 53% (28% GST plus other levies), short of the WHO's 75% target. A potential strategy is to raise the GST to the 40% limit and add an excise duty. Tobacco products, including cigarettes and pan masala, contribute significantly to government revenue.
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