ITC, VST Industries, Varun Beverages shares fall amid report of additional tax on sin goods

Shares of ITC, VST Industries and Varun Beverages came under selling pressure on Friday amid a report which said the government is likely to charge more taxes on the sale of sin goods in addition to the proposed 40% levy. ITC shares slipped 2.5% to Rs 416.95 against the previous close of Rs 415.85 in early deals today. Market cap of the firm slipped to Rs 5.08 lakh crore. 

Varun Beverages, the stock of Pepsico bottler, fell nearly 2.5% to Rs 476.75 against the previous close of Rs 498.45 on BSE. Market cap of the firm fell to Rs 1.61 lakh crore. 

On similar lines, shares of tobacco maker and seller VST Industries declined 2% to Rs 268.20 on BSE. Market cap of the firm stood at Rs 4564 crore. 

In an interview to the Business Standard, Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal said the government will impose an additional levy on sin goods over and above the 40 per cent tax, even after loans for the compensation cess are fully repaid. 
 
This is a double blow to the sin goods stocks in consecutive sessions. On Wednesday, the GST Council approved a hike in tax rate on carbonated beverages to 40 per cent from 28 per cent at present. The sin goods stocks took a beating in the previous session.