Bullish for ITC: Govt Withdraws 18% Excise Duty on Unbranded Tobacco

The Union government has withdrawn the 18% excise duty on unbranded, unmanufactured tobacco, which was initially imposed in December 2025. This reversal of policy is a direct relief for the tobacco industry.

This move reduces the tax burden on a segment of the tobacco industry, potentially leading to improved profitability or more competitive pricing for unbranded tobacco products. It signals a more favorable regulatory environment for this specific product category.

Companies like ITC, which have a significant presence in the tobacco sector, are likely to benefit. The withdrawal of the duty could positively impact their margins or allow for greater market penetration in the unbranded segment, leading to a positive sentiment for ITC shares.

Traders should monitor the stock performance of tobacco companies, particularly ITC, for immediate reactions. Further analysis on the proportion of unbranded tobacco in their product mix will provide a clearer picture of the long-term impact.

• •Union government withdrew 18% excise duty on unbranded, unmanufactured tobacco.
• •Duty was imposed in December 2025 and formalized on February 1.
• •Risk flag: Future policy changes
• •Risk flag: Overall health concerns for tobacco industry