Retrospective effect: textile millers oppose imposition of GIDC
The textile millers have strongly objected to the imposition of Gas Infrastructure Development Cess (GIDC) with retrospective effect, saying that the government was burdening the industry with innovative surcharges and taxes one after another. Under the GIDC Act 2015, the textile industry has been paying Rs 100/MMBTU GIDC through utility bills since October 2015. However, the addition of arrears to the utility bills has perturbed the textile millers by and large.
These arrears were pending since 2011 when the GIDC Act 2011 was announced formally, followed by the GIDC Ordinance 2014 and finally the GIDC Act 2015. Already, the higher courts in Karachi, Lahore and Peshawar have granted permanent injunctions to a good number of textile millers against the imposition of GIDC while issuing a direction to the government for amendments in the Act.
A Special Committee of the Senate on GIDC has also recommended that the Captive Power Plants (CPPs) should be treated at par with the ‘industrial sector’, which enjoys exemption under the GIDC Act 2015. The textile industry circles have blamed the federal finance ministry for the mess, which was showing the GIDC as revenue in the budget documents. So far, they added, a meager amount of Rs 280 million has been spent by the government on the infrastructure development for the gas projects while it has collected Rs 200 billion on account of the GIDC while over Rs 100 billion is still outstanding against various consumers including CNG outlets, fertiliser, cement plants, general industry and others.
It is also worth noting that the government had also mentioned in the IMF’s 8th review of Pakistan economy that it has adjusted the weighted average consumer prices at end-December 2013 through the application of GIDC on industry and captive power plants. “The GIDC was further adjusted with the FY 2014.15 budget to generate 0.55 percent of GDP in revenues. However, due to the pending court cases, the recovery of the GIDC has been suspended,” it added.
The industry sources said the Ministry of Petroleum and Natural Resources had stopped the Sui Northern Gas Pipelines Limited (SNGPL) from recovery of GIDC from the industrial sector as the Senate has constituted a special committee to monitor the implementation of the GIDC Act 2015 and remove the anomalies within three months on 16th June 2016. But the ministry withdrew this letter through another communication dated 11th August 2016 without any tangible reason. Meanwhile, the Senate body on the GIDC met with Senator Ilyas Bilour in the chair on 17th August 2016 where the Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi was due to appear and record his statement.