Shares fall on News of India's Excise Increases

Source from:  tr.itsmyiq.com Mar 5, 2008 03/06/2008

Shares in ITC Ltd, India's dominant cigarette manufacturer, fell 4.5 per cent following the government's decision to at least double the excise tax on non-filter cigarettes, according to a report by Saikat Chatterjee for Bloomberg. Non-filter cigarettes were said to account for 20 per cent of ITC's cigarette sales but less than 10 per cent of its profit from cigarettes. Shares in Godfrey Phillips India Ltd, the nation's second-biggest cigarette maker, fell by 2.2 per cent, while those of third-placed GTC Industries Ltd. dropped by 10.0 per cent. One forecast suggested that cigarette volumes in India would probably fall by 2.5 per cent in the year to March 2009, compared with an earlier estimate that had predicted a gain of four per cent. In his budget for the financial year starting April 1, Finance Minister, Palaniappan Chidambaram, raised the excise tax on unfiltered cigarettes to the level of filtered cigarettes. The excise duty on unfiltered cigarettes 60 mm long or less was increased almost fivefold to Rs819 per 1,000 pieces, while that on longer unfiltered cigarettes was more than doubled to Rs1,323 per 1,000. Enditem