The Indian equity markets are currently going through a volatile period, and any negative news appears to only play a greater role in further adding to the woes at Dalal Street.
GST On Tobacco?
One such development has come to pass in the case of cigarette-making companies. Two of the major names in sin goods arena, ITC and Godfrey Phillips slowed down on Thursday, February 20.
This development comes to pass amid reports of a possible Goods and Services Tax, or GST, hike on tobacco products.
This hike in GST prices could further increase the prices, and put the volume sold down. Interestingly, in the recently presented budget (presented on February 1), there was no mention of additional duty or cess of any kind on these products. Something that has been seen in the past.
Currently, tobacco products are kept in the highest slab of the GST system at 28 per cent. In addition to other varied taxes, the total sum of taxes on these products could amount to over 50 per cent.
ITC Ltd
When it comes to the company shares, ITC, a conglomerate that makes most of its money through the sale of tobacco products, started the day on a lower note than its previous closing. After a momentary rise, the shares slipped in value.
At the time of writing, the Kolkata-based conglomerate saw its shares decline by 1.27 per cent or Rs 5.15.
ITC is the maker of Gold Flake, Classic, India Kings, among other brands. This decline took the overall of the company shares to Rs 401.25 per piece.
In fact, at the time of writing, the company also hit its 52-week low mark of Rs 396.20 per share.
Godfrey Phillips India Ltd
When it comes to the other company, Godfrey Phillips, its shares saw and even deeper cut in the intraday trade.
The company that sells Philip Morris's Marlboro, among others, saw its shares decline by over 5 per cent in the early half of the day's trade.
At the time of writing, the company shares' decline amounted to Rs 340.55 or a mammoth 5.19 per cent, taking the overall value of the company shares to Rs 6,218.70 share.
