Custom Duty on Cigarettes Hiked in Budget 2023: Market Reaction in Focus

  • Economy News
Custom Duty on Cigarettes Hiked in Budget 2023: Market Reaction in Focus
Credit: © Reuters.

By Malvika Gurung -- While the customs duties on items like select electronic components, shrimp feed and seeds used in the manufacture of lab-grown diamonds have been slashed, finance minister Nirmala Sitharaman has raised the duties on items like cigarettes and gold bars, among others.

Cigarettes can now start getting costlier, as the finance minister in her fifth Budget speech on Feb 1, 2023, announced hiking the customs duty on cigarettes by 16%.

According to Sitharman’s Budget announcement, the national calamity contingent duty (NCCD) levied as a duty on the excise duty, has been increased to Rs 510 for every 1,000 cigarette sticks from Rs 440 for entry-level filter cigarettes up to 70 mm long.

The NCCD for mid-range cigarettes having lengths of over 70 mm but less than 75 mm has been raised to Rs 630/1,000 cigarette sticks from Rs 545. The duty for premium range cigarettes has been hiked to Rs 850/1,000 sticks from Rs 735.

As a result, cigarette stocks traded mixed. For instance, the mega-cap heavyweight ITC (NS: ITC ) tanked 6.6% in Wednesday’s intraday trade to hit the session’s low at Rs 329.1/share but closed 2.6% higher at Rs 361.4 apiece.

The tobacco manufacturer Godfrey Phillips India (NS: GDFR ) plunged 7.5% on Wednesday and closed 5.26% lower at Rs 1,820.05 apiece, while Golden Tobacco (NS: GLDN ), on the other hand, surged 5% in the day.

One of the oldest manufacturers of cigarettes in India, NTC Industries' (BO: NTCI ) shares slid 6.55% in Wednesday’s trade.

Read Also: Govt Slashes Customs Duty on Phone, TV Parts in Budget 2023: Why, Impact?

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