(Reuters) -Indian shares were little changed at the open on Tuesday as consumer stocks fell after a report of a likely tax hike on cigarettes, tobacco and aerated drinks, offsetting broad-based gains.

The cigarette maker, ITC, saw its shares decline 3 per cent in the intra-day trade today, while aerated drinks maker, Varun Beverages, clocked a 5 per cent fall in the market

Shares of Varun Beverages fell by 5.2% as the Group of Ministers proposed raising the GST rate on aerated drinks to 35%. This hike in taxes affects Varun Beverages significantly since most of its revenue comes from India’s aerated beverages segment.

CNBC-TV18 reported on December 2 that the Group of Ministers (GoM) have decided to propose a 35% special GST rate on aerated drinks, along with Tobacco and Tobacco products.

The Group of Ministers on GST rate rationalisation has recommended to raise tax on aerated beverages to 35% from the current 28%.

Shares of ITC, Varun Beverages and Godfrey Phillips India ended lower on Tuesday after the Group of Ministers on GST rate rationalisation decided to hike tax on sin goods like aerated beverages, cigarettes,

Shares of ITC fell 2.94 per cent to hit a low of Rs 463.10. Godfrey Phillips India declined 2.45 per cent to Rs 5,616.85. VST Industries was down 0.12 per cent at Rs 325.30. The PepsiCo bottler Varun Beverages slipped 3 per cent to Rs 613.

Shares of Varun Beverages Ltd. traded 3.39 per cent in Monday's trade at 09:59AM (IST). Around 68,668 shares changed hands on the counter. The scrip opened at Rs 624.95 and touched an intraday high and low of Rs 643.

Cigarettes is a significant contributor to ITC's overall topline and is one of the major businesses for the company aside of FMCG & other, Agri, Paper and Hotels.

Shares of ITC Ltd., Varun Beverages Ltd., VST Industries Ltd., and other companies linked to cigarettes and beverages dropped by up to 5%