Share Market Tips: Investors investing in the shares of ITC, a company related to cigarette, FMCG and hotel business, are going to be very volatile in the coming times. The reason is that in the coming budget, there is a possibility of increasing the tax on other tobacco products including cigarettes. The government has recently constituted a nine-member expert committee to prepare a roadmap for the new tax policy on tobacco products.
Committee formed for higher tax on tobacco products
It is believed that this committee may suggest imposition of more tax to reduce the consumption of tobacco products. The committee will review the current tax structure for all types of tobacco and submit its recommendations to the government by preparing new roadmaps and options for tax rates for the budget and future for 2022-2023. It is believed that Finance Minister Nirmala Sitharaman may increase tax rates on cigarettes and other tobacco products while presenting the budget for the 2022-23 financial year. In fact, India has to continuously work towards reducing its consumption by complying with the WHO’s Framework Convention, for which this committee has been constituted.
What should investors do?
Market experts are advising investors to stay away from ITC for the time being. They feel that the tax on cigarettes and other tobacco products is sure to be increased in the budget. Therefore, till the budget is presented, investors should stay away from this stock for the time being. Let us tell you that ITC’s stock is counted among the most defensive stocks in the market. Despite the major fall in the market, there is not much fall in ITC. In the month of September, a big breakout was seen in the stock of ITC. After touching a low of Rs 199 in May, the stock touched a high of Rs 265 on October 18. But since the formation of the Expert Committee, the stock of ITC continues to decline. Today ITC’s stock is trading at Rs 236.50 with a fall of 3.41 percent.