Cigarette Excise Hike: ITC Plunges 10%, Godfrey Phillips 19% After New Duty

• Tobacco company shares, including ITC and Godfrey Phillips, sharply dropped after the government imposed a new excise duty on cigarettes.
• ITC shares fell over 10% to Rs 369.20, leading Nifty 50 losses, while Godfrey Phillips India shares tumbled 19% to Rs 2,230.30.
• The Central Excise (Amendment) Bill, 2025, approved in December, paved the way for increased duties on tobacco products.
• A new excise duty of Rs 2,050–8,500 per 1,000 sticks, effective February 1, will be imposed in addition to a 40% GST.
• Analysts predict a 22-28% increase in overall costs for 75-85 mm cigarettes, potentially raising ITC's longer cigarette prices by Rs 2-3 per stick.

Why It Matters: New excise duty on cigarettes caused a sharp decline in tobacco company shares like ITC and Godfrey Phillips.