ISLAMABAD: The Cabinet Committee on disposal of Legislative Cases (CCLC) has approved amendments in the Gas Infrastructure Development Cess (GIDC) Act, 2015 aimed at resolving the issue related to spending of stuck up GIDC amounts of over Rs. 400 billion, well informed sources told Business Recorder.
On January 22, 2026, the Petroleum Division apprised the CCLC that the Gas Infrastructure Development Cess Act, 2011 and the GIDC Ordinance, 2014 were struck down by the Supreme Court of Pakistan in 2014 and subsequently Gas Infrastructure Development Cess Act, GIDC 2015 (GIDC Act, 2015) was enacted in May 2015 while giving retrospective effect to Cess charged and collection under GIDC Act 2011 and GIDC Ordinance, 2014.
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It was stated that the primary objective of the imposition of GIDC on gas consumers other than domestic and commercial was to generate capital / funding for the following gas pipeline projects: Iran-Pakistan Pipeline, Turkmenistan-Afghanistan-Pakistan India Pipeline Project, LNG projects or other ancillary projects. The Section 4(1) of the Gas Infrastructure Development Cess (GIDC) Act, 2015 stipulated as under:
4: Utilization of Cess: - (1) the Cess shall be utilized by the Federal Government for or in connection with infrastructure development of Iran “Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline Project, LNG or other ancillary projects.
The Petroleum Division further apprised the CCLC that the constitutionality (vires) of the GIDC Act, 2015 was challenged by industrial, fertilizer and CNG consumers before various High Courts.
The decisions of the High Courts were further appealed before the Supreme Court of Pakistan by the consumers.
The Supreme Court, through its judgment dated 13th August 2020 while dismissing all the civil appeals and connected petitions filed by the appellants, upheld the constitutionality of the GIDC Act, 2015, with retrospective effect.
However, court did not allow charging of fresh Cess rather it allowed recovery of arrears in instalments. It was also noted that despite the judgement of the Supreme Court, consumers continued to pursue the matters in the High Courts.
The CCLC was apprised that in the judgment, the Supreme Court held that GIDC was a fee, not a tax. Being a fee, it must contain the quid pro quo element, implying that a service must be rendered against the amount collected.
The Court had noted that the Cess constituted a fee for the projects specifically mentioned in Section 4 of the Act. It was further observed by the Court that if the intended gas infrastructure projects were not pursued, the very purpose of levying the Cess would deem to be frustrated, rendering the Act inoperative.
The Petroleum Division further apprised the CCLC that in order to resolve the issue related to stuck up GIDC amounts over Rs 400 billion in various High Courts, the Prime Minister constituted a-high-powered GIDC Committee on 8th November, 2022.
The committee, soon after its constitution, held few meetings on the issue but no progress could be made because of chronic litigation pending disposals in the High Courts. The latest meeting of the said Committee was convened on March 19, 2025 under the chairmanship of the Minister for Finance and Revenue.
The meeting was attended by the Minister for Petroleum Division, Attorney General for Pakistan, and representatives from the Petroleum Division, Finance Division and the Law Division.
In the said meeting it was agreed to amend section 4 of the GIDC Act, 2015 to address the protracted litigation.
CCLC was further informed that in compliance with the recommendations of the Committee the Petroleum Division, after consulting the relevant Divisions, submitted a summary to CCLC soliciting approval of the draft ‘GIDC (Amendment) Act, 2025.
However, the CCLC vide its decision of September 3, 2025 did not approve the proposal and directed the Petroleum Division to re-examine the proposed amendment in order to ensure that same did not go beyond the scope and objective of GIDC Act 2015.
Accordingly, Petroleum Division redrafted the amendment bill to address the concerns raised by the CCLC.
The revised draft as GIDC (Amendment) Act, 2025 was shared with the Law and Justice Division for legal vetting, which provided its concurrence on December 15, 2025.
In view of the foregoing, Petroleum Division solicited the approval of the draft ‘GIDC (Amendment) Act, 2025’ in terms of Rule 16(l)(a) of the Rules of Business, 1973.
The CCLC was also informed that the proposed amendment was circulated for views/comments of Finance Division before submitting first summary on the matter to CCLC. The Finance Division vide its letter had stated that it had no objection to the proposal mentioned in Para 5 of the said summary.
The Cabinet Committee for Disposal of Legislative Cases considered the summary dated 1st January, 2026 submitted by the Petroleum Division regarding “Amendment in the Gas Infrastructure Development Cess (GIDC) Act, 2015” and approved the proposal of the summary subject to the condition that the amendments proposed by the CCLC would be incorporated in the draft Bill by the Law and Justice Division, before the case is placed before the Cabinet for approval.
Copyright Business Recorder, 2026
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