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GIDC ordinance promulgated to help collect Rs.210 Billion

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Sep 02, 2019: Dispelling the impression that half of the outstanding liabilities of various sectors including fertilizer, textile, power and compressed natural gas (CNG) was waived off through promulgation of Gas Infrastructure Development Cess (GIDC) Ordinance, Minister for Energy Omar Ayub Khan Monday said the option had been provided to all the industrial sectors if they applied for new rate and paid 50 per cent outstanding of the GIDC.

Holding a press conference along with Special Assistant to Prime Minister on Petroleum Nadeem Babar, he said the industrial sectors would have to ink an agreement with the government besides withdrawing cases from the courts.

He said it would not only help collect Rs210 billion to the national exchequer due to settlement of long litigation issue but also create conducive environment for investments besides restoring confidence of investors.

The minister said impression was being given that the government was going to collect only Rs210 billion against Rs420 billion under GIDC head.

The various sectors collected Rs147 billion out of total Rs420 billion under GIDC during 2011-2014 which had declared ultra vires by the Supreme Court, he added.

He said through the ordinance, it would help end eight year long litigation besides enhancing revenue collection from Rs15 billion to Rs42 billion per annum.

The minister said the amount was collected for infrastructure development but the past government utilized it for the budgetary support.

He said the past government had extended the said facility for CNG sector in 2018 through an amendment in GIDC adding that the incumbent government offered it to all sectors.

Omar said the government had taken up the matter since its inception and detailed discussions were made with all industrial sectors by a committee headed by the then finance minister Asad Umar.

He said the GIDC amendment ordinance 2019 was promulgated to reduce GIDC for all industrial sectors and bring at par with CNG sector besides providing equal business opportunities to all sectors.

He said no exemption was being given in collection already made under GIDC head.

He made it cleared that the government did not take this decision unilaterally as the past government had already provided the facility to the CNG sector on 50 per cent payment to the national exchequer through an act of the parliament.

However, he said other sectors were totally ignored resulting persistent litigation and stay orders. The GIDC revenue plunged to 15 per cent due to litigation and court cases, he added.

Omar Ayub said the government had decided to extend this facility to all other sectors like CNG to enhance the revenue collection.

He said it was also decided to carry out forensic audit in GIDC in order to calculate actual collection from the public.

In case, the fertilizer companies had collected more GIDC from the farmers, it would be returned to them, he added.

Nadeem Babar said fertilizers companies had Rs71 billion outstanding GIDC and they could clear it by paying around Rs35 billion to the national kitty. Similarly, the general industry and Independent Power Producers (IPPs) had Rs43 billion and Rs10 billion respectively and could clear it on payment of its 50 per cent, he added.

He said the said option was given to all sectors but they would have to sign agreement with the government besides withdrawing cases from the courts.

Responding to a question, Nadeem Babar said the ordinance was promulgated after taking all the industrial sectors on board.

To another question, he said an amount of Rs2.8 billion was additionally charged from the consumers through over billing. Sui Northern Gas Pipelines Limited and Oil and Gas Regulatory Authority had been directed to get the case disposed of at the earliest and return to the consumers.


Posted on: 2019-09-02T23:50:00+05:00