Lower taxes to fire up revenues, earnings for cigarette makers

After 5 years of decline, cigarette industry expected to post volume growth under GST framework

Shares of cigarette companies were among the biggest gainers on Monday after the central board of excise and customs last weekend clarified on the goods and services tax structure on cigarettes. The new tax structure is expected to be about 6 per cent lower at around 58 per cent vs 63-64 per cent earlier. While ITC (up 5.7 per cent), VST Industries (4 per cent) hit their 52-week highs, Godfrey Phillips India too was up 2 per cent. The key beneficiary though is seen as ITC, which commands an estimated 80 per cent market share in the duty-paid cigarette industry