Share prices for major companies including Varun Beverages, ITC, Godfrey Phillips India, and VST Industries experienced significant declines during Tuesday’s trading session.
Varun Beverages and Tobacco Stocks Decline on GST Hike Report
Summary of Market Impact:
- Varun Beverages: Shares dropped by 5.18%
- ITC: Stock price fell by 3%
- Godfrey Phillips India: Shares decreased by 3.16%
- VST Industries: Stock declined by 2.27%
Cause of Decline
The downturn in these stocks follows reports suggesting a possible increase in the GST slab on ‘sin goods’—cigarettes, aerated beverages, tobacco, and similar products—from 28% to 35%.
Details on Proposed GST Changes:
The Group of Ministers on GST rate rationalization has recommended raising the tax on these products. This would introduce a new 35% tax rate specifically for tobacco and related items.
Analyst Insight
Analysts predict that higher taxes on cigarettes could lead to a substantial decrease in sales volumes due to reduced consumer spending. Potential issues such as downtrading, counterfeiting, and shifts to cheaper alternatives could further impact sales.
Company Responses:
In response to these reports, ITC stated that the news is not based on any internal company event or information.
Stock performance snapshot at 2:40 PM:
- ITC: Down 1.12%, trading at ₹471.80 per share
- Godfrey Phillips: Down 1.03%, at ₹5,698.30
- VST Industries: Up 0.25%, at ₹326.50
- Varun Beverages: Down 1.90%, at ₹620.75 on the BSE
Disclaimer: The above views and recommendations are from individual analysts or brokerage firms and do not reflect the opinions of HealthyFinancer. Investors are advised to consult certified experts before making investment decisions.