ITC stock rises despite GST committee rejects tobacco tax cut bill

You are currently viewing ITC stock rises despite GST committee rejects tobacco tax cut bill

ITC stock rises despite GST committee rejects tobacco tax cut bill

The GST fitment committee felt that the change is not required as the bidi industry is a small scale industry and so it was kept free from cess.

 MONEYCONTROL NEWS

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Considering that there is no compensation cess on bidis, the tobacco industry sought rationalisation of compensation cess on products such as 70mm cigarettes.

Trade

NSELIVE

05 Oct, 2023 10:15

438.50  

2.40 (0.55%)

Volume 1998646

Todays L/H 436.10440.50

More 

Shares of ITC opened 0.40 percent higher on October 5, a day after the GST Council’s Fitment Committee rejected a tobacco industry proposal to effectively cut tax rates. As of 9:40 am, the stock was trading 0.66 percent higher at Rs 438.85.

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The tobacco industry had proposed a uniform additional compensation cess on cigarettes, bidis, smokeless tobacco products, and lower compensation cess on cigarette sticks up to 70 mm. Separately, auto component industry had also sought lowering of GST on electric vehicle (EV) batteries from 18 percent to 5 percent. according to a Moneycontrol report.

Sources told Moneycontrol that the GST Council Fitment Committee has rejected the EV batteries tax proposal too.

This move could impact stocks of cigarette-manufacturing companies like ITC. Cigarette continue to contribute to a majority of ITC’s business, which is also involved in agri products, hotels, and non-cigarette FMCG products. In Q1FY24, ITC’s cigarette business saw a 13 percent growth in revenue at Rs 7,465.27 crore, year on year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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