KARACHI, Jan 14: Tandoori Nan and Sheermal will become costlier by Re1 to Rs2 as the sales tax department has issued notices to the producers of these items, aiming to impose some tax on these items.

The tax department has taken Sui Southern Gas Company’s help in gathering information about these producers regarding their monthly gas bills. The department says the big Tandoori Nan and Sheermal producers have been purchasing gas on commercial rates. In view of only the amount of gas consumption, it has been established, or may be presumed, that the total utility bills exceed/may exceed the threshold of Rs600,000 per annum and, therefore, the producer of Nan and Sheermal is liable to be registered under Section 14 of the Sales Tax Act 1990.

The department has reminded the producers that through the Finance Act 2007, all commercial and industrial units having total utility bills (gas, telecom, electricity etc) of Rs600,000, or above, per annum are required to be registered with the sales tax department.

The department has asked the producers to file applications for the sales tax registration on the prescribed form STR-1 available on the CBR website and the LRO counter of the sales tax department.

A maker of Nan and Sheermal said that the price of Nan had surged to Rs5 apiece as compared to Rs4 about one-and-a-half months back. It was available at Rs3 a year ago. The rate of Sheermal had risen to Rs14 from Rs12 two months back whereas it was selling at Rs10 a year back. At some places, Sheermal is selling at Rs15 apiece. Similarly, Kulcha price has been increased to Rs12 from Rs10. A year back, it was selling at Rs8.

He said the cost of production had gone up substantially in the last one year. The price of Maida used in making of Sheermal, Taftaan and Kulcha has risen to Rs2,200 per 80kg bag from Rs1,100 a year back. The 16kg ghee tin price has gone up to Rs1,700 from Rs980 a year back.

“Our business has not been stable after the uncertain political conditions coupled with the postponement of various functions after the killing of PPP chairperson Benazir Bhutto on Dec 27,” the baker said.

Over 2,000 marriage and valima receptions, which were scheduled to be held from Dec 27 to Jan 1, have been postponed or cancelled.

On Monday some leading producers of these items held a meeting with the chairman of the Alliance of Market Association, Atiq Mir. They said they would be forced to close down their businesses in case the department tried to enforce sales tax on Tandoori Nan and other items.

Atiq said the producers were already perturbed by the continuous increase in flour prices and many of the producers had already packed up their businesses.

He said some 4,000-5,000 producers of various kinds of Roti were operating in Karachi, but notices had been given to some 1,000 leading producers, supplying quality items for wedding parties and other receptions.