INSUBCONTINENT EXCLUSIVE:
Kolkata: With the last GST Council meeting on Saturday not making any changes in cigarette taxation unlike what the street was expecting,
Share price of VST Industries was up by 14.08% to close at Rs 2849.5 at the BSE on Monday when the benchmark Sensex was up by
Roy, senior VP at Edelweiss Securities.
The cigarette industry was significantly impacted last year by the sharp upward revision in GST
compensation cess whereby tax on cigarettes rose sharply by 13% with an even steeper increase of 19% for the king-size filter segment
Coupled with the increase in excise duty rates announced in last year budget, this resulted in an incremental tax burden of over 20% on the
cigarette business post implementation of GST
ITC Ltd had recently reported that the share of duty-paid cigarettes has come down substantially in 2017-18 accounting for 11% of the total
tobacco consumption in the country due to high and discriminatory taxation on the sector while overall tobacco consumption in the country
The company said the tax on cigarettes has nearly trebled over the last six years whereby the taxation is about 50 times higher than other
ITC has estimated the exchequer is losing more than Rs 13,000 crore revenue annually on account of tax evasion on cigarettes which is even
higher when the evaded taxes on other tobacco products are also considered
While the legitimate cigarette industry has declined steadily since 2010-11 at a compound annual rate of 4.8% per annum, illegal cigarette
volumes have grown at about 5% per annum during the same period, the company said
