Post Goods & Services Tax(GST), ITC has increased the prices of select cigarette brands. Under the new tax regime, the cigarette has encountered 6-7% hike in the cess rates.
Earlier this month the GST council had reduced the additional cess on cigarettes by 6%. But the council again held a meeting on July 17, in which they increased the compensation cess by ₹485-792 per thousand cigarettes.
An ITC spokesperson said, “Prices of select brands have been revised. There is adequate availability of stocks in the market”.
The company clarified the price hike would be immediate. The notice stated that “In respect of cigarettes manufactured or packed prior to July 18 and are yet to be sold to consumers, the maximum retail price stands revised”.
Due to the hike in cess rates, the prices of Classic and Gold Flake brands had been increased to ₹150 for a pack of 10. The price of Wills has been raised to ₹94 for a pack of 10. Wills Flake is now priced at ₹66.
Deshmukh said, “The price increase will hit sales and thus the company’s top line. However, since ITC is passing on the additional tax burden to consumers, its operational margins will remain stable”.