Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: due date for vat payment :: empanelment :: cpt :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT RATES :: TDS :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4%
 
 
VAT (Value Added Tax) »
 15% rise in collectionof VAT for Oct-Nov
 China to simplify tax scheme after switch to VAT
 Cabinet clears key proposals on VAT, regularisation of jobs
 Cases of VAT overcharging flood consumer forum
 State seeks relief from Centre
 Flat rate VAT changes for small businesses explained
 Cenvat Credit Of Additional Duties Of Customs [Cvd] On Imported Coal
 Excise Dept puts VAT refund on fast track
 Consumer fora receive 18 VAT plaints
 Appointment of Assistant VATO - F.3(14)/Fin(Rev-I)2012-13/DSVI/334
 Bio-diesel body seeks VAT relaxation

Increased VAT on cigarettes to impact ITC
July, 06th 2012

The Uttar Pradesh Government recently increased state VAT applicable for cigarettes to 50% from 17.5%. The implication of this is likely to impact ITC's performance as UP accounts for around 5% of ITC's cigarette sales in value terms. The Street has varying view on the effect of this on the company's stock price.

According to Manoj Menon of Kotak Securities, if the company absorbs this incremental tax, it will impact the company's FY13 EPS by 2%. The report highlights that in FY2007-08, UP had levied a 33% trade tax on cigarettes when most other states had moved to 12.5% VAT (which was reversed within a few months). According to channel sources, trade channels took advantage of the differential tax in UP thereby limiting the impact on the industry. While the firm's view on ITC's stock remains positive, it sees the strong performance of the stock in the near term as limiting the upside in the stock.

Another equity research firm Espirito Santo Securities has recommended a sell on ITC. According to the firm's latest report on the stock, the risk of tax increases on tobacco has heightened and more states may see tobacco taxation as an easy option. ITC is heavily exposed to several of the states with the greatest fiscal vulnerability.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Portfolio

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions