Shares of most cigarette makers surged after the Finance Minister slashed the corporate tax rates on Friday.
Meanwhile, the S&P BSE Sensex was up 1143.24 points or 3.01% to 39,157.86.
The market surged after the Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.
Shares of cigarette makers rose. ITC (up 7.03%), VST Industries (up 5.25%) and Godfrey Phillips India (up 3.67%) advanced.
As on 31 March 2019, VST Industries paid a corporate tax of 35.31%, Godfrey Phillips India paid 33.55%, ITC paid 32.97%.
Last week, the government banned manufacturing and sale of e-cigarettes. Justifying the ban, Sitharaman cited a US report that said e-cigarette sales have risen 77% because of consumption by students.
An electronic cigarette or e-cigarette is a handheld battery-powered vaporizer that simulates smoking, but without burning tobacco. E-cigarettes are heated and the vapors of nicotine as well as the flavours are then inhaled. Using an e-cigarette is known as "vaping".
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