Shares of ITC tumbled 12.63 per cent to close at Rs 284.60 on BSE. During the day, the stock dived 14.99 per cent to Rs 276.90.
At NSE, shares of the company plunged 12.48 per cent to end at Rs 284.55.
The stock was the worst hit among Sensex and Nifty components.
Following the sharp slump in the stock, the company's market valuation slumped Rs 49,730.64 crore to Rs 3,46,125.36 crore.
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Among others, shares of VST Industries went down sharply by 7.83 per cent, Godfrey Phillips India tanked 5.69 per cent and Golden Tobacco fell by 3.63 per cent on BSE.
"This will impact the earnings of the cigarette companies as companies will either absorb the tax impact or see some drop in volumes if they hike the price," Angel Broking said in a report.
"GST cess on cigarettes dented Nifty's surge, while global markets and the uncertainties prevailing around the earnings season kept the domestic investors cautious today," said Anand James, Chief Market Strategist, Geojit Financial Services Ltd.
Cigarette stocks were down in the previous trading session also.
The GST Council yesterday raised the cess on cigarettes to take away an estimated Rs 5,000 crore annual "windfall" manufacturers could have reaped from lower GST rates.
However, cigarette prices will not change as a result of the increased cess.
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