Govt. withdraws GIDC Ordinance

September 4, 2019 (MLN): A statement issued from the Prime Minister’s Office a short while ago has announced that in interest of transparency and good governance, it has been decided that the Gas Infrastructure Development Cess (GIDC) Ordinance will be withdrawn.

According to the notice, the total amount stuck in GIDC litigation from January 2012 till December 2018 is about Rs.417 billion.

In the first round of litigation, the Supreme Court (SC) was pleased to annul the GIDC statute. Moreover, the Federal Government’s Review Petition was also dismissed by the SC.

Thereafter, fresh litigations were brought about, which are presently under challenge before the Provincial High Courts.

With this as backdrop, an ordinance was issued with to recover 50% of the stuck revenue through an out of court settlement after consultation with the industry.

However, due to the recent controversy, the Prime Minister decided to scrap off the GIDC ordinance to maintain good governance. He also directed the Attorney General to move an application for urgent hearing in Supreme Court.

Prime Minister Khan also addressed the nation via the notice, informing that going to the Court carries a risk because the decision could go either way. This means that the government could get the whole amount or could lose it all and possibly forgo any prospect of future revenue collections under this head.

On top of this, the government could be saddled with the burden of administering refunds of approximately Rs.295 Billion of the principal amount.

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