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Government Process to Recover Rs517 Billion GIDC Amount Hits Snag

The procedure initiated by the Petroleum Division to recover Rs517 billion raised by various sectors of the economy at the head of GIDC (Gas Infrastructure Production Cess) has hit snags, as all stakeholders such as industrial, fertilizer, CNG and captive power plants have submitted their petitions to the Supreme Court for review.

A senior official in Petroleum told Pak Revenue that the Government started the recovery process in compliance with the SC judgement released on 13 August 2020 and wanted to recover Rs21 billion per instalment from all economic players.

The Supreme Court had directed the government to recover the Rs417 billion GIDC sum, which as of 1 August 2020 has risen to Rs517 billion in 24 equal instalments. The gas utilities increased the bills with GIDC amount for the month of September but all the bills with the GIDC amount were found null and void due to the review petitions and stay order by high courts.

The fertilizer sector owed Rs195 billion to the government, Rs76 billion to the electricity sector, captive power houses, CNG and the industrial sector, the official said.

All the players moved the high courts of Peshawar, Sindh, and Lahore and managed to recover the GIDC sum from the stay on the method. Moreover, some players have also sent their petitions to the Supreme Court seeking to amend the decision previously announced on 13 August 2020 by the apex court.

Industry wants Captive Power Plants to be regarded as industry. The fertilizers sector says if the government wants to recover GIDC, they would then have to lift the fertilizers price by Rs400 per bag.

 The CNG sector has also introduced its petition for examination. The economic players requested a further raise in GIDC payment instalments from the Supreme Court pleading that the economy had suffered a great deal because of COVID-19 and the sectors are still struggling hard just to survive.

The CNG sector requested relief stating that the operation of the impugned demand notices may be suspended and that no punitive action shall be taken against the CNG stations, including the suspension of gas supplies, until their written petition is finally disposed of.

In its last law, the PPP-led government had introduced the GIDC to generate the financial resources for the country’s gas development infrastructure including the planned IP and TAPI gas pipelines, but the Nawaz government refused to provide the GIDC number, rather it had decided to use it to fund the budget.

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