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Shares of cigarette and tobacco product makers ITC, Godfrey Phillips and VST Industries dropped on Friday (January 2, 2026) morning, extending their previous day’s decline, after the government imposed an additional excise duty on such products effective February 1.
ITC’s stock tumbled 5.11% to ₹345.35 — its 52-week low — on the BSE.
The stock of Godfrey Phillips India declined 4.58% to ₹2,184.60.
Shares of VST Industries also dipped by 2.56% to ₹248.60.
On Thursday, Godfrey Phillips India tanked 17.09% to settle at ₹2,289.65 on the BSE. Shares of ITC tumbled 9.69% to end at ₹363.95 and VST Industries dipped 0.60% to ₹255.15.
The Finance Ministry has notified amendments to the Central Excise Act imposing an excise duty of ₹2,050-8,500 per 1,000 sticks based on cigarette length, effective February 1. This duty will be over and above 40% GST.
The Ministry has also notified the Health and National Security Cess Act, levying cess on the manufacturing capacity of pan masala-related businesses from February 1.
The total tax incidence on pan masala, after taking into account 40% GST, will be retained at the current level of 88%.
The revised tax structure replaces the existing regime of 28% GST, along with a compensation cess on tobacco and related products.
Published – January 02, 2026 11:49 am IST
