Cigarette Stocks Plummet as GST Council Mulls Higher Tobacco Taxes

Shares of major Indian cigarette manufacturers tumbled on February 20, 2025, following reports that the GST Council is considering a significant increase in tobacco taxes. Industry leader ITC saw its stock drop 3.5%, while Godfrey Phillips and VST Industries fell 5.2% and 4.1% respectively. The proposed tax hike aims to discourage tobacco consumption and boost government revenue. Analysts warn that higher taxes could impact sales volumes and profit margins across the sector. However, some experts suggest that established players like ITC may be better positioned to weather the changes due to their diversified product portfolios and strong market presence.

 

Sources: Economic Times, Moneycontrol, Business Standard