ITC rallies as GST council caps tax on tobacco and cigarettes

ITC Ltd gained over 6% on Friday after Goods and Service Tax (GST) Council on Thursday decided to cap levy on tobacco products to Rs 4170 per 1000 sticks. 

At 1002 hours, ITC stocks were trading at Rs 285.20 a piece on BSE, soaring above Rs 17 or 6.34%. 

On Thursday, the GST council agreed to levy tax on cigarettes and chewing tobacco at either 290% or Rs 4,170 -per 1000 sticks or a combination of both. 

Motilal Oswal said, "Cap announced on the cess applicable on the 5 commodities under the GST, to bring the GST rates on these commodities closer to the existing ones.  The GST progressed further. Some clarity on rates could bring upsides to stocks like ITC."

Apart from tobacco, GST council also levied taxes on other products like luxury cars, pan masala and aerated drinks.

The council expects the GST to be implemented by July 01, 2017.