Excise duty on cigarettes: Godfrey Phillips tank 8%, ITC hit 52-week low amid tax levy

Cigarette stocks ITC, Godfrey Phillips fall: Listed sin stocks including ITC Ltd and Godfrey Phillips India Ltd tanked as much as 8 per cent during the trading session on Thursday after the central government announced to impose an excise duty on cigarettes from February 1 onwards.

These duties will be levied in a range of Rs 2,050-8,500 per thousand sticks based on the length of the products. The finance ministry said in an order late on Wednesday. The move could increase the prices of cigarettes in India, which has an estimated active smoking population of more than 10 crore.

Following the announcement, shares of Godfrey Phillips India tanked more than 8.15 per cent to Rs 2,536 on Thursday, January 1 at 9.50 am. with its total market capitalization slipping below Rs 40,000 crore. The stock has tanked more than 35 per cent from its 52-week high at Rs 3,945, hit on September 30, 2025.

Similarly, FMCG major ITC tanked 5.95 per cent to Rs 379 as of the same time, hitting a 52-week low on the first trading session of the new calendar. Its marketcap was seen at Rs 4.80 lakh crore. The stock has tumbled nearly 20 per cent from its 52-week high at Rs 471.30, hit a year ago.

In December, the Union Government of India approved a new law – the Central Excise (Amendment) Bill 2025 – that replaces a temporary levy on cigarettes and tobacco products. Wednesday's statement showed that the excise duty would be imposed on cigarettes in addition to the existing 40 per cent goods and services tax.

Cigarettes in India currently attract up to 53 per cent of retail prices as total taxes, much below the World Health Organisation (WHO) benchmark of 75 per cent aimed at discouraging their consumption. This also includes a 28 per cent goods and services tax and an additional value-based levy based on the size of the cigarettes.

Godfrey Phillips has a product portfolio including Marlboro, Four Square, Red & White, Cavanders, Focus and others. ITC has Classic, Gold Flake, India Kings, Wills Navy Cut, Insignia, Players, Scissors, Capstan and American Club among its key cigarette brands.