ITC, one of India’s leading FMCG Company, has increased 74mm sized cigarette pack prices by Rs.10. According to sources, the company hiked the prices to account for the increased VAT as well as excise duty on cigarette packs.
The VAT and the excise duty imposed on cigarette as announced in this year’s Union Budget have been increased by 1.5 per cent and 18 per cent respectively. CLSA Sales note reveals that a price increase across the board might be announced by ITC post the announcement of Tamil Nadu’s State budget in the last week of March.
Other states including West Bengal and Assam have also increased tobacco taxes from 20 per cent to 25 percent in their respective states thereby resulting in an increase in cigarette prices. Assam accounts for 3 per cent and West Bengal for 7 per cent of ITC’s total income from its cigarette sales.