| |
Imposed a 15% surcharge on excise duty on cigarettes.
| |
The duty on 'biris' would increase from Rs 6 to Rs 7 per thousand biris.
| |
The total duty on pan masala would be 55%-60%.
| |
Miscellaneous tobacco products like chewing tobacco would be charged to a total duty of 60%.
|
| |
Budget Impact
|
| |
Would adversely affect cigarette manufacturers as usual. ITC, VST, Godfrey Philips are some of the players who will take a hit (that was expected).
Gains through reduction in dividend tax
|
Company |
No. of
shares (m) |
Dividend
per share |
Tax savings
(Rs m) |
% addition to
net profit |
|
ITC |
245 |
9.0 |
265 |
2.7% |
|
| |
Industry wish list
|
| |
Industry chambers are in favour that the specific excise duty structure based on the length of cigarettes should be continued.
|
| |
The Confederation of Indian Industries (CII) in a pre-budget memorandum, have also recommended that the current slabs on cigarettes too should be maintained at current levels.
|
| |
| |
Key Positives |
| |
It’s a habit industry and hence, continues to thrive despite odds.
|
| |
Being a habit industry, it finds it comparatively easy to pass on excise duty hikes.
|
|
|
| |
Key Negatives |
| |
Heavily penalized through punitive taxation policies.
|
| |
It has been proposed to ban public smoking, disallow tobacco companies from advertising in sports and cultural events. The bill if passed will put pressure on volume growth.
|
|
| | |
