Pretty soon, Pakistan could well have a GIDC court. Such is the level of litigation the controversial Gas Infrastructure Development Cess (GIDC) has faced ever since it was first levied in 2011. The National Assembly passed the bill and the upper house is expected to have done the same by the time you are reading this.
There was opposition, but lesser than expected as the PPP voted in favour of the bill. Recall that the Sindh Assembly had passed a resolution against GIDC as recently as last year. The text of the bill remains exactly the same as previous versions of the GIDC exercise. Provincial governments are likely to knock the doors of the courts pretty soon and another stay on GIDC collection may just be round the corner. That said, the federal government, this time around seems to have done the homework, getting the bill approved by the Parliament, instead of presenting it in the money bill.
Recall that the Supreme Court of Pakistan had earlier ordered that the GIDC is a fees and not a tax, and therefore it was against the constitution to be levied through a money bill. The detailed judgment also offers fresh hope for the government as it stated that the non-inclusion of GIDC in the divisible pool does not make GIDC unconstitutional.
Ishaq Dar and company can also draw more fiscal hope from the fact that the passage of bill without consultation in the Council of Common Interests does not hinder it being constitutional, as per the courts judgment. These are the grounds the provincial governments are likely to take whenever they go to courts. Not that the provinces have a very strong case this time around, especially after the Supreme Courts earlier remarks, but stay orders from high courts are never far away.
The KP government had earlier hinted at raising the issue at the CCI meeting. Now that the bill has been passed, the next CCI meeting would be nothing more than an exercise in futility. The Supreme Court had stated in its order earlier that although non-consultation with provinces does not affect the legality of the bill, "it would have been appropriate had the federating units been taken into confidence, particularly in the context of Article 160 (3) of the Constitution."
Other than provincial governments, also expect a couple of fertilizer firms to be paying handsome lawyers fees again. The bill has levied the cess on new fertilizer plants as well, in no uncertain terms. But that seems highly unlikely to actually happen, if history is any guide. Surely, the government is not that naïve to not know it won't be able to collect the GIDC from new plants.
Then again, the government also knows well that Iran-Pakistan or TAPI gas pipelines are not happening either. Yet, the two still find a way in such bills. The utilization of the cess is meant for gas infrastructure related developments, and an annual report regarding the utilization of the same has been made mandatory. But do not be surprised, if that report never arrives, as everyone knows and more importantly the IMF knows, the GIDC is meant to plug the fiscal deficit. Gas infrastructure projects can wait.
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