Canindia News

Calamity duty levied on cigarettes a negative for ITC, Godfrey Phillips

New Delhi, Feb 2 (IANS) The Union Budget for 2020-21 has levied a national calamity contingent duty (NCCD) on cigarettes and tobacco products which is negative for companies like ITC and Godfrey Phillips, according to Reliance Securities.

As per the Budget documents, NCCD is being increased ranging from Rs 200 to Rs 735 per thousand, depending upon length of cigarette and on filter/non-filter basis.

On smoking mixtures for pipes and cigarettes, NCCD is being increased from 45 per cent to 60 per cent. On other forms of smoking tobacco (other than smoking mixtures for pipes and cigarettes) and forms of chewing tobacco, NCCD is being increased from 10 per cent to 25 per cent.

In a post Budget note, Reliance Securities said that the provision is a negative for tobacco companies like ITC and Godfrey Phillips.

On the other hand, listed domestic footwear companies like Bata and Relaxo are expected to gain from the hike in customs duty on footwear. Custom duty import hike on footwear to 35 per cent (from 25 per cent) and parts of footwear to 20 per cent (from 15 per cent) is likely to encourage domestic manufacturing, the note said.

Customs duty has been increased on a range of goods from electronics, footwear, electric vehicles, furniture and others in the Union Budget.

The hike in import duty on refrigerator/ACs compressors from 10 per cent to 12.5 per cent will adversely affect companies like Voltas, Blue Star, Havells due to a higher import cost.

However, fast moving consumer goods (FMCG) majors are expected to benefit, says Reliance Securities due to a rural push in the Budget.

The government focus on doubling farmer income is likely to benefit rural expenditure and rural growth is likely to pick up, a key beneficiary for FMCG companies HUL, ITC, Dabur, Marico, and Asian Paints.

The reduction in personal income tax is likely to hike the discretionary spending, key for retail companies like Trent, ABFRL, Jubilant Foodworks, and Titan.

Custom duties on various categories of electric vehicles will increase by 5-15 per cent from April 1, 2020 which would encourage domestic EV makers, EV component makers and would specially help the CV makers like Ashok Leyland, M&M, Tata Motors and other OEMs.




IIFL dealer, 5 others barred from securities market for front running

CanIndia New Wire Service

India can become AI laboratory of the world: NITI Aayog CEO

CanIndia New Wire Service

India needs to move beyond exporting raw materials: Goyal

CanIndia New Wire Service

Growth in data tariffs, broadband reach show move towards higher ARPU

CanIndia New Wire Service

Three pvt banks in TN, Kerala hit headlines for wrong reasons

CanIndia New Wire Service

Stimulus, healthy macros expected to lift markets (IANS Equity Outlook)

CanIndia New Wire Service

‘CIRP threshold against personal guarantors should be raised’

CanIndia New Wire Service

Unscathed: Pent-up demand more sustained, predictable now, says Kia India (IANS Special)

CanIndia New Wire Service

Accounts not performing due to delay won’t be labelled NPAs: Centre

CanIndia New Wire Service

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More


Stay up to date with the latest news and exclusive offers directly in your inbox