Four cigarette stocks tanked by 3.63% to 11.51% at 10:10 IST on BSE after the Goods and Services Tax Council yesterday, 17 July 2017, increased the compensation cess on cigarettes by 48.50 paise to 79.20 paise per stick with effect from 18 July 2017.
Meanwhile, the S&P BSE Sensex was down 197.63 points or 0.62% at 31,877.15.ITC (down 11.51% at Rs 288.25), Godfrey Phillips India (down 4.57% at Rs 1,171.40), VST Industries (down 3.95% at Rs 3,420) and Golden Tobacco (down 3.63% at Rs 57) tumbled.
While the peak Goods and Services Tax (GST) rate of 28% stays and so does 5% ad valorem cess on top of it on the cigarettes, the fixed cess has been hiked between Rs 485 and Rs 792 per thousand sticks.
The increase in cess is expected to help the government raise around Rs 5000 crore of additional tax revenue, reports suggested.
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