The federal government on Monday clarified that 50 percent waiver of GIDC to business tycoons is neither a 'free lunch' nor a gift for fertilizer sector as is being widely reported. Addressing a press conference along with Advisor to Prime Minister on Petroleum Nadeem Babar, Petroleum Minister Omar Ayub termed it a big success. He said that it was not a 'free lunch' for those who had billions of rupees waived off, adding the government would conduct a forensic audit of fertilizer plants to assess how much collection they made under the GIDC account.
Nadeem Babar said that export-oriented sectors are being exempted from new rate of 50 per cent GIDC. "The new fertilizer plants have also been exempted from the GIDC," he added. He maintained that new fertilizer plants had obtained stay order from court saying that GIDC was not applicable on them under a policy. The cess was imposed to recover money to utilise to set up gas pipelines and other infrastructure of imported gas. Money collected under this head had been used for budgetary support and therefore different courts had given stay order against recovery of GIDC, he added.
He said that collection of GIDC was 15 per cent during the last eight years whereas 85 per cent recovery was not being made due to stay orders obtained from courts. He said that PML-N had also approved the GIDC Act from the Parliament enabling the CNG sector to pay 50 per cent outstanding dues. He said that this process continued following consultation with different industries.
The minister and close aide of the Prime Minister also ruled out any benefits being given to different groups. They said that GIDC rate was high and this was being reduced by 50 per cent. They said that the government is now collecting Rs 15 billion and the step would enable it to collect Rs 42 billion every year following a settlement under the GIDC Ordinance.
Regarding 'higher' profits made by IPPs, Omar Ayub said that a committee has been formed to analyse the profits and agreements with IPPs. He said that this committee would also assess the heat rate and energy audit of IPPs.
The government is anticipating to collect Rs 210 billion out of total Rs 417 billion outstanding on account of GIDC against various sectors of economy. The major beneficiaries is fertilizer sector as the government has waived off Rs 65 billion outstanding against new fertilizer plants saying that they were not liable to pay GIDC under the agreements signed during PPP government. However, these new fertilizer plants had also charged the cess from farmers as they raised the prices of urea. These plants had not been receiving gas on discounted rates but they have received a Rs 65 billion waiver.
Under the ordinance, the government of PTI has penalised those sectors like small industry that continued paying this tax for the last eight years. However, the government had waived off around Rs 200 billion of those who had not paid and obtained stay orders from courts. Out of total Rs 417 billion, old fertilizer plants have to pay Rs 71 billion, new fertilizer plants, Rs 65 billion; general industry, Rs 43 billion; IPPs, Rs 10 billion; KE, Rs 34 billion; Wapda Gencos, Rs 30 billion; and CNG, Rs 78 billion. The new fertilizer plants would not pay whereas other sectors could avail the schemes of waiving off 50 per cent outstanding dues.
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