ITC share price declined nearly 5 percent after the government formed a committee for future taxation policy for tobacco. On Tuesday, the cigarette-cum-FMCG stock hit an intraday low of Rs 247 on the Bombay Stock Exchange (BSE).
ITC share price quoted at Rs 248.85 apiece at 2:41 pm, down Rs 13 or 5.22 percent — sharply lower from the 52-week high of Rs 265 it had hit Monday.
ITC had recently joined NSE's blue-chips back again in September after it was left behind in June. The stock had remained rangebound even as the benchmark indices and other blue chips surged till September 21. While Nifty surged over 20 percent between January to August 2021, ITC traded within Rs 211-213 range but the stock surged 12 percent in September.
Different tobacco stocks reacted differently to the news, with Golden Tobacco rising over 5 percent to Rs 162. It quoted at over Rs 7 higher at Rs 162. VST Industries, on the other hand, slumped nearly 3 percent to Rs 3,705. It was priced at Rs 3,718, down 2.4 percent.
Godfrey Phillips India showed mixed performance as the stock surged over 1 percent to hit the intraday high of Rs 1,331. And the slumped over 3 percent to hit the intraday low of Rs 1,272. It was last trading half a percent down at Rs 1,307.
On taxation policy
The Union Ministry for Health and Family Welfare has set up an expert committee to review the taxation policy for tobacco products. It will develop a comprehensive tax policy on the products from the point of view of public health.
The committee will also analyse the existing tax structure for all forms of tobacco and work on a blueprint for tax policy. It will also advise on the steps India should take to become MPOWER compliant.
Tax revenue from the sale of tobacco products in India has almost doubled in the past 10 years. In 2020, tax revenue stood at Rs 356 billion whereas, in 2011, it stood at Rs 152 billion.
(Edited by : Ajay Vaishnav)
First Published: IST