has hiked cigarette prices by 10% to 20% to offset the increase in taxation on cigarettes announced in the budget. The maximum price hike has happened in the small and regular size sticks which account for bulk of the sales.
ITC, which accounts for every three of four cigarettes sold in the country, has increased prices by 10% in the premium segment, while for the regular cigarette of 69-mm size the price has gone up by around 14-16%. In entry level sub-64 mm small size cigarettes, the hike is between 12% and 20% depending on the brands.
When contacted, an ITC spokesperson confirmed that prices of a number of brands have been revised. He did not share further details. Other cigarette makers like Godfrey Phillips and
too are now going to hike prices in the next few days, two industry executives said. The budget had hiked the National Calamity Contingent Duty (NCCD) on cigarettes anywhere between 212% and 388% depending on cigarette stick size. NCCD is levied as a duty on the excise.
Analysts like JP Morgan have estimated that the net tax incidence is around 10% higher after the budget while the specific tax (ex-ad valorem) per stick is up by about 13%.
Tax hike on the lower priced 64mm cigarettes is the highest.
ITC’s share closed with a gain of 0.95% at Rs 212.7 on Tuesday on the Bombay Stock Exchange when the benchmark Sensex went up by 0.58%. The ITC scrip had hit a 52-week low due to the increase in taxation.