Excise duty on cigarettes: Godfrey Phillips tank 17%, 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 17 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 ITC settled at Rs 363.95 on Monday, falling 9.69 per cent for the day. Its total market capitalization stood at Rs 4.55 lakh crore for the day. Godfrey Phillips ended 17 per cent down at Rs 2289.65, with its total mcap falling below Rs 36,000 crore mark for the day.

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.