Shares of cigarette and pan masala companies are in focus today in early trade ahead of the tabling of two key tax bills in the Lok Sabha that could reshape health-related levies on tobacco and allied products.

ITC slipped 0.85% to Rs 400.80, Godfrey Phillips India was down 1.05% at Rs 2,842.90, while VST Industries was marginally higher at Rs 255.25 on the NSE, with the group trading slightly weaker than the broader market.

According to television reports citing “official-level discussions”, the draft “Health Security se National Security” cess framework envisages a slab-based levy of roughly Rs 2,700–11,000 per 1,000 cigarettes, with about Rs 3,000 per 1,000 sticks proposed for up to 65 mm filter cigarettes and Rs 4,500 for 65–70 mm sticks, alongside a 25% cess on cigars and cheroots. For the pan masala sector, the cess is understood to be linked to machine capacity, continuing the trend of using production-based surrogates for tax administration in this segment.

The measures are expected to be anchored in the Central Excise Amendment Bill, 2025 and the accompanying “Health Security se National Security” Cess Bill, which together seek to replace the existing GST compensation cess on cigarettes, chewing tobacco, cigars, zarda, hookah and related products, and give the Centre fiscal space to recalibrate excise once the compensation mechanism ends.

In market terms, the immediate impact is renewed policy overhang for ITC, Godfrey Phillips and VST, with investors now watching the wording of the bills and the ensuing Parliamentary debate to gauge whether the eventual structure simply preserves the current tax incidence or nudges effective rates higher for these “sin” categories.