Representative image showing a person smoking a cigarette.
Credit: iStock Photo
There has been no change in the price of cigarettes as the government announced no hike during the presentation of the Union Budget 2024. This move was welcomed by the ITC, India's largest cigarettes producer.
Though taxation of tobacco products falls under the purview and authority of Good and Services Tax Council (GST), the government is allowed to intervene and levy a National Calamity Contingent Duty (NCCD) on cigarettes.
This tax can be adjusted during the budget. However, Finance Minister Nirmala Sitharaman kept the tax unchanged during this budget presentation saying they were last changed with a 16 per cent hike in NCCD last year.
ITC receives much of its revenue from cigarettes . They contribute more than 80 per cent of the company's net profit and about 45 per cent of its total revenue. This year ndia's biggest cigarette producer surged as much as 5 per cent.
A report by Economic Times has stated that a historical precedence shows that ITC shares have consistently posted positive returns on Budget Day over the past decade despite tweaks in the NCCD tax.
On Tuesday, Nirmala Sitharaman presented the Union Budget 2024, highlighting the Modi govt 3.0’s priorities across multiple sectors.T
The Budget identified the following areas as priorities: productivity and resilience in agriculture, employment & skilling, inclusive human resource development and social justice, manufacturing & services, urban development, energy security, and infrastructure.