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Shares of ITC, VST Industries and Godfrey Phillips India boom (AI IMAGE)
highlights
- Cigarette prices are going to increase in the country.
- The reason for this is that the Central Government has decided to impose excise duty on cigarettes.
- The new duty will range from Rs 2,050 to Rs 8,500 per thousand sticks depending on the length of the cigarette.
Excise Duty on Cigarettes: Cigarette prices are going to increase in the country. The reason for this is that the Central Government has decided to impose excise duty on cigarettes. The new duty will range from Rs 2,050 to Rs 8,500 per thousand sticks depending on the length of the cigarette. This rule will come into effect from 1 February 2026. According to the report of news agency PTI, the Finance Ministry issued an order in this regard late on Wednesday night. Let us give you detailed information about the complete news.
Smoking cigarettes will become expensive from February 1
According to the report of news agency PTI, in December 2025, the Central Government had approved the ‘Central Excise (Amendment) Bill 2025’. This new rule will replace the temporary tax applicable on cigarettes and tobacco products. The Finance Ministry said that from February 1, excise duty will also be applicable along with the existing 40% GST on cigarettes. Shares of cigarette companies ITC and Godfrey Phillips fell up to 8% in trading on Thursday (January 1). Cigarette manufacturing companies such as ITC and Godfrey Phillips India are also likely to face pressure on sales and profits.
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ITC at lowest level in almost two years
Following the announcement, ITC shares fell as much as 4.14% to the day’s low of Rs 386.30 on BSE. At the same time, shares of Godfrey Phillips fell by 8% to Rs 2540.15. ITC shares have reached their lowest level in almost two years. Imposition of excise duty on cigarettes may impact the sales of cigarette manufacturing companies like ITC, VST Industries and Godfrey Phillips India. There is a possibility of a fall in the shares of these companies. About 10 crore people in the country smoke cigarettes. The government has also imposed a new cess on Pan Masala. This will also come into effect from 1 February 2026.
Heavy tax on tobacco products
The government has fixed new excise duty on cigarettes, which will depend on the length of the cigarette. Shorter cigarettes will be taxed less and longer cigarettes will be taxed more. Now this duty on every thousand cigarette sticks can range from Rs 2,050 to Rs 8,500. After this decision, there is a possibility of increase in the prices of cigarettes, which will directly impact the pockets of consumers. The objective of the government is not only to increase revenue but also to reduce the use of tobacco products and protect the health of the public.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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