(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.

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

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.

India 10-year bond yield fell 0.41 per cent to 5.89 after trading in 5.87-5.91 range Shares of Varun Beverages Ltd. traded 0.79 per cent in Wednesday's session at 12:32PM (IST). The stock opened at Rs 625.

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 1.91 per cent down in Tuesday's trade at 02:04PM (IST). Around 458,776 shares changed hands on the counter. The counter opened at Rs 605.95 and touched an intraday high and low of Rs 628.

No allottee has been awarded shares more than 5% of the equity shares offered in the QIP, Varun Beverages said.

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.