The cabinet has approved Gas Infrastructure Development Cess settlement mechanism for the companies with reduction in rate of GIDC that is subject to settlement of outstanding dues. In a press briefing here on Thursday, Minister for Finance Asad Umar said that cabinet had approved 50 percent waiver in GIDC for companies to settle their outstanding dues.
He further said the government would also offer reduced rate in GIDC to those companies which would settle their outstanding and that the same incentive would be offered to fertilizer sector on the condition that they would pass on benefit to farmers. The minister maintained that the government would take the amendment to GIDC Act to the Parliament and if passed, it would have positive impact on revenue collection.
The federal cabinet has agreed to give 50 percent waiver on GIDC to individual companies following the refusal of different sectors to pay it. The minister said the resolution of that long pending issue of GIDC had a similar resolution that was prescribed for the CNG stations last year. Last year, through an amendment to the GIDC Act, the government had notified to collect 50 percent of the cess levied or charged from January 2012 to May 2015 in two tranches for the compressed natural gas (CNG) sector. The All Pakistan CNG Association agreed to pay due amount of Rs 12 billion.
The minister for finance maintained that fertilizer industry would be provided 50 percent waiver on the condition that they pass on the impact to farmers. He said those incentives would help reduce the cost of urea by Rs 200 per bag. The fertilizer producers, captive power plant owners and CNG filling outlets had owed the government Rs 400 billion on account of GIDC, a big amount which they had kept with them after obtaining stay orders from the courts, the sources said. The Sindh High Court in its verdict concluded that GIDC was ultra vires of the Constitution. Currently, this case is pending adjudication with the Supreme Court.