Tobacco firms breathe easy post budget 2011

Cigarettes Union Budget 2010-11 may have come as a positive surprise for tobacco companies, which were bracing themselves for an excise duty hike. Finance Minister Pranab Mukherjee kept excise rates unchanged for cigars and cigarettes.

Structural changes in the excise duty on cigarettes, cigars and cigarillos coupled with an increase in rates, which had been proposed in the last budget to the tune of 10-18% have been kept unchanged. These items would continue to attract a basic excise duty of 10% and an additional excise duty of 1.6%.

India’s biggest cigarette manufacturer ITC surged 7.97% to Rs 168.60 at 14:10 IST after the announcement or rather the lack of any. Meanwhile, Golden Tobacco rose slightly up 0.66% at Rs 84.00.

source: www.moneycontrol.com

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