ITC extends fall post UP government tax hike
ITC is trading lower by 1.3% at Rs 246.85, extending its Monday’s 3.4% fall, after the Uttar Pradesh (UP) government decided to increase taxes on tobacco products from 12.5% to 50%. The state contributes around 5% to ITC’s revenue from cigarette sales.
“ITC may increase the price of cigarettes by 2% to mitigate the impact of value added tax (VAT) announced by Uttar Pradesh government," said Manoj Menon of Kotak Institutional Equities, while talking to TV channel.
The stock opened at Rs 250 and hit a low of Rs 246 on the National Stock Exchange. A combined 8.93 million shares have changed hands on the counter so far on both the exchanges.