Shares of ITC Ltd. were in focus on Wednesday, September 3, as investors tracked reports of possible tax changes in the upcoming GST Council meeting. The stock was trading marginally higher at ₹408.25, up 0.37% from the previous close of ₹406.75, with an intraday range of ₹407.30 to ₹409.60.
According to sources, the government is considering shifting the GST levy on cigarettes and tobacco products from the current dealer price or base price to the maximum retail price (MRP). The proposal under review also suggests a flat 40% GST rate on all sin goods, including tobacco.
To sustain existing taxation levels, the Centre may further impose additional excise or special duties on tobacco products. Several states have reportedly sought a “significant share” of these duties to offset revenue pressures once the compensation cess is eliminated as part of the broader GST 2.0 reforms.
For ITC, which derives a large portion of its revenue and profitability from cigarettes, such tax reforms will be closely watched by investors. While MRP-based taxation could raise effective levies, analysts say the government may balance this with special duties to avoid severe disruption in pricing and demand.
ITC has a market capitalization of ₹5.17 lakh crore, with a dividend yield of 3.51% and a P/E ratio of 14.68. The stock has traded in the range of ₹390.15 to ₹528.50 over the past year.
Market participants will keep a close eye on the GST Council’s decision later this week, which could significantly influence sentiment around ITC and other cigarette makers.