Setting a target of April 1, 2017 for rollout of the Goods and Services Tax, the government today unveiled a detailed roadmap for its implementation and said it is aiming for an optimal rate of taxation though the final decision will be taken by the GST Council.
He rejected suggestions that the non-tobacco businesses of the group should be made to grow faster than the tobacco business, but rued that ITC's investment plans were getting delayed due to a long time required for getting approvals.
During the April-June quarter, ITC's revenue from cigarettes increased 6.42 percent to Rs 8,230.60 crore from Rs 7,733.43 crore in the year-ago period.
Gautam Chhaochharia, Head-India Research at UBS is neutral on consumer staples and discretionary space.
The government needs to urgently plug all loopholes in the FDI policy on tobacco and have a comprehensive ban on it, ensuring that no steps are taken to dilute it, says non-profit body Crusade Against Tobacco.
Nomura also expects that ITC's pricing strategy may boost volumes in FY17. It says that ITC has only increased prices by 13 percent at the premium end of its portfolio translating into a weighted average price hike of 7.6 percent the lowest in four years due to excise duty hikes.
The judge directed the authorities to confiscate the products seized as per Section 14 of Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution Act, 2003 (COPTA ACT).
According to a recent study, 114 Indians die every hour due to causes which can be directly linked to tobacco. The decision to increase the size of pictorial warnings on packets to 85 percent and higher taxes do not seem to have deterred people from consuming tobacco.
WHO said a good way to amplify the message that 'tobacco kills' and disrupt the psychology of tobacco consumption is making 'plain packaging' of tobacco products also known as standardised packaging mandatory.
Other data on Tuesday showed housing starts rose more than expected last month, with builders ramping up the construction of single and multi-family homes, suggesting the economy was regaining steam early in the second quarter.
The tobacco companies issued a fresh application today indicating that the warning cannot be applied retrospectively as the inventory was manufactured prior to the date of pictorial warning notification, and that they should be allowed to sell the stock.
On May 5, ITC had said it has shut down its production till the time it is able to comply with â€œinterim requirementsâ€ of 85 per cent pictorial warnings.
Farmers and micro retailers from across Karnataka today staged a march here demanding rollback of a rule mandating 85 percent pictorial warnings on tobacco products, calling it a "harsh policy" that does not balance the interests of stakeholders.
Currently, foreign direct investment (FDI) is prohibited in manufacturing tobacco. However, what DIPP is also considering a ban in technology collaboration. It will mean including the licensing of franchises as well as brand name in management contract and in case of Godfrey Phillips this regards with the brand name of Marlboro.
The Delhi High Court today sought the Centre's response on a plea seeking quashing of notifications issued by the Health Ministry on printing 85 percent pictorial warnings on tobacco products.
India's biggest cigarette maker ITC Ltd, part-owned by British American Tobacco, has not implemented the government order, saying it contradicts a parliamentary committee's recommendation for warnings to cover half a cigarette pack.
"The tobacco farmers and retailers of Gujarat are facing an unprecedented threat because of the policy shock of 85 per cent warnings on beedis and chewing tobacco, which has led to overnight closure of the tobacco industry in India," said GTMA President Bhikhu Bhai Patel.
According to the notification, unpackaged products of chewable tobacco, too, are covered under the ambit of the ban.
"Micro tobacco retailers demand withdrawal of 85 percent warning regulation. They are facing a huge threat to their livelihood because of close down of the production by tobacco products by its manufactures due to sudden enforcement of regulation to enlarge graphic health warnings," Confederation of All India Traders (CAIT) said in a statement.
A parliamentary panel today termed as "too harsh" the government's proposed 85 percent pictorial warnings on tobacco products and recommended a drastic reduction in size, evoking sharp criticism from MPs and health experts.
The revenue insurance scheme for plantation crops, an official said, will be launched once the operational parameters are finalised by the government.
Jubilant investors are hurriedly buying shares of ITC as brokerages are bullish on the stock. In his Budget proposal for FY17, Finance Minister Arun Jaitley hiked excise duty on cigarettes to 10-15 percent.
The stock tumbled to intraday low of Rs 268 per share, down 8 percent. However, the stock quickly gained and ended with 2 percent gains.
Motilal Oswal expects a blended excise duty increase of 10 percent. In FY15-16, excise duty was hiked 25 percent in cigarette lengths less than 65mm and 15 percent increased for lengths over 65 mm.
Jefferies has maintained buy rating on ITC but lowered FY16-18 earnings per share (EPS) estimates by 3 percent and target price to Rs 381 per share mainly to account for higher tax rates. It says near-term earnings are likely to be weak but believes we are nearing the bottom of the weak demand cycle.