NEW DELHI: FMCG and hospitality major ITC soared in trade on Monday, riding on the corporate tax rate cut euphoria. The rise was also supported by the
GST rate cut on room tariffs on Friday.
On Friday, the GST Council cut rates on room tariffs from 25 per cent earlier to 18 per cent. With this, GST on room tariffs will be in three slabs. Rooms prices below Rs 999 will be tax exempt, those between Rs 1,000 and Rs 7,499 will be taxed at 12 per cent and rooms priced above Rs 7,500 will be taxed at the rate of 18 per cent.
The rate cut will help the stressed industry that is reeling due to fall in tourist footfalls for the second quarter.
No change in GST on tobacco also helped the stock. Market was expecting a hike in taxes that has been stable for the last two years. CLSA sees ITC attractively valued at 20.5x one-year fwd earnings.
Source: economictimes.indiatimes.com