Higher tobacco taxes hit ITC, Godfrey Phillips and VST’s Q1 underlying sales
A 40% GST rate and new excise duties pushed cigarette pack prices up by about ₹22–25 per 10 sticks, pressuring volumes, net revenue and profit. ITC’s reported cigarette revenue rose on duty pass-through, while revenue excluding duties fell 31.45%.
Higher 40% GST and new excise duties hit underlying Q1 cigarette sales, volumes and profitability at ITC, Godfrey Phillips India and VST Industries, despite reported revenue growth driven by duty pass-through. Manufacturers raised pack prices and adjusted portfolios.
Why this matters
The tax-led sales pressure follows recent signals that ITC Q1 profit fell 27% as cigarette taxes hit margins and that standalone profit declined despite revenue growth.
Retail-company signals are accelerating, up 222367% QoQ.