ITC Share Price in Focus as New Cigarette Tax Kicks In; Stock Sees Worst January Ever

ITC share price (NSE: ITC) will be closely watched today as the new cigarette taxation comes into force from February 1, 2026. Investors are also tracking any further clarification that may be provided during the Union Budget 2026 speech.

Earlier, the government notified that a 40% GST on cigarettes and tobacco products would apply from February 1. However, clarity is still awaited on the total tax burden, including additional duties and cesses.

How Cigarette Taxation Has Changed

Previously, cigarettes were taxed at 28% GST, along with a specific cess ranging from ₹2,076 to ₹4,170 per 1,000 sticks, an ad valorem cess of 5% to 36%, and a National Calamity Contingent Duty (NCCD) of ₹510 to ₹850 per 1,000 sticks.

Under the new structure, cigarettes will attract 40% GST, along with a new excise duty ranging from ₹2,100 to ₹8,500 per 1,000 sticks, in addition to the existing NCCD.

Heavy Impact on ITC Stock

ITC share price fell nearly 20% in January, marking the worst start to a calendar year for the stock on record. The sharp fall wiped out over ₹1 lakh crore in market capitalisation during the month.

Cigarette Business Performance Remains Strong

Despite tax concerns, ITC reported 6.5% year-on-year growth in cigarette volumes for the December quarter. This was higher than market expectations of 5% to 6% growth.

Also Read: Union Budget 2026: Traditions, Timings and Interesting Facts You Should Know!

ITC Share Price Movement

ITC share price was trading at ₹321.75 on the NSE at 9:42 AM on February 1, up ₹3.15 or 0.99% for the day. The stock opened at ₹318.80, touched a high of ₹325.15, and fell to a low of ₹316.45 during the session. The stock has a 52-week high of ₹471.50 and a 52-week low of ₹316.45. It offers a dividend yield of 4.46%, with the latest quarterly dividend at ₹3.59 per share.

Conclusion

The implementation of higher cigarette taxes has put strong pressure on ITC’s stock, leading to its worst January performance on record. While cigarette volumes remain healthy, investor sentiment will depend on further tax clarity and Budget announcements.

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