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Smoking is injurious to health. Now, it is fast becoming detrimental to your wealth as well. Following the Budget proposal to raise the excise duty on cigarettes, prices of cigarettes have risen up to 20 per cent in the past few days.
Cigarette makers are yet to increase the prices officially. But many shopkeepers are demanding more than the maximum retail price. For instance, a 10-stick packet of Navy Cut costs Rs 49. However, retailers are selling these packets for Rs 53-55 each. “Stockists have already increased prices. We have no option but to charge a higher price,” said a retailer. For certain brands, he said, the price rise was up to 20 per cent.
ITC, which manufactures three of every four cigarettes sold in India, declined to comment. “We cannot comment on this at the moment,” a spokesperson said.
CLSA said in a note to clients ITC might increase cigarette prices across brands in the last week of March.
In his Budget speech on February 28, Finance Minister P Chidambaram had proposed a rise in the excise duty on cigarettes. West Bengal and Assam had also increased tobacco taxes.
Last year, the excise duty on cigarettes was raised up to 21 per cent, prompting companies to raise prices up to 15 per cent.
