The Union government and its Group of Ministers (GoM) has created ripples in the intraday trade on Tuesday, December 3.
Government Proposes GST Hike
This is because, according to reports, the panel has proposed a 35 per cent ‘special rate’/GST on Tobacco and Aerated Beverages. In addition, there are other changes that have been proposed by the panel.
However, these hikes have garnered the most attention so far. The effect of that is visible in the performance of certain companies at Dalal Street.
As a result of this reported hike, the shares of Godfrey Phillips, which apart from being one of the biggest cigarette makers also handles the sale of Philip Morris International product Marbloro.
As a result of this reported hike, the shares of Godfrey Phillips, which apart from being one of the biggest cigarette makers also handles the sale of Philip Morris International product Marbloro. | File
Philip Morris, an American company, is one of the biggest name in the tobacco industry globally.
Another company to struggle in the day’s trade was another behemoth of the ‘Sin Goods’ market, ITC (formerly known as Indian Tobacco Company).
Godfrey Phillips India Ltd
The shares of Godfrey Phillips opened at Rs 5,710.00 per share, below its previous day’s closing. the company shares have progressed to proceed in the red.
At the time of writing, the shares of the cigarette maker dipped by 1.09 per cent or Rs 62.90. This has taken the overall value of the Godfrey Phillips shares to Rs 5,694.25 per piece.
ITC Ltd
When we look at ITC, the multinational company based out of Kolkata has diversified its business in recent decades and has continued to rely heavily on tobacco products for its revenue. The company made 37 per cent of its revenue from tobacco in FY23.
The shares started on a bad note, with decline of around 3 per cent. The decline tapered a little, while continuing to trade in red. The shares of the tobacco company dipped to 1.44 per cent or Rs 6.85. This took the overall value of ITC shares to Rs 470.35 per piece.
This proposed hike is also expected to expect other daily use customer products like cosmetics, handbags, and watches. In addition, surge in taxation is also expected to happen in the case of Ready Made Garments (RMGs).
