The Gas Infrastructure Development Cess Ordinance, 2014, would lapse on May 22, 2015 and the government has not yet taken any steps to table it in parliament. GIDC budgeted to generate Rs 145 billion in the current year has so far generated Rs 99 billion before big industries got a stay order from the courts (from January 2013 till July 2014).
The government promulgated an ordinance on 25 September 2014 with the objective of overriding the stay granted by high courts which stipulated validation of the cess collected: "notwithstanding any omission or anything to the contrary contained in the Gas Infrastructure Development Cess Act, 2011 (XXI of 2011) or the rules made thereunder, or anything to the contrary contained in any decree, judgement or order of any Court the cess levied, charged, collected or realised by the company from gas consumers under the aforesaid Act shall be deemed to have been validly levied, charged collected or realised under the provisions of this Ordinance."
However, the government has been unable to collect any GIDC after the ordinance was promulgated as petitions were filed challenging the ordinance. "The Gas Infrastructure Development Cess Ordinance, 2014" was extended for a further period of 120 days after it lapsed on January 22, 2015 and the second expiry date is May 22, 2015. The GIDC was imposed to fund the Iran-Pakistan gas pipeline, Turkmenistan-Afghanistan-Pakistan-India and Liquefied Natural Gas pipeline projects.
The Supreme Court (SC) of Pakistan on April 15, 2015 while dismissing federation''s review petition against the Peshawar High Court''s decision that had declared GIDC as a fee said that the SC will not pass any observation on the validity of the ordinance as the matter is under adjudication in the Islamabad High Court and Lahore High Court.
According to petroleum ministry officials, if the ruling Pakistan Muslims League (PML-N) government fails to make GIDC a law through a bill within the next 10 days, the government will have to payback the collected amount to the gas consumers. When the officials were asked about the mechanism of payback to consumers, they said that the GIDC was passed on to final consumers and so far there is no defined method for payback.
They added that in last meeting of the Council of Common Interest (CCI), the Sindh government proposed depositing the funds collected under GIDC in provincial governments'' accounts so that the provinces can spend these funds on different projects, but the Minister for Petroleum Shahid Khaqan Abbasi rejected this proposal, saying that these funds must be utilised towards improving the dated infrastructure, and thereby help reduce Unaccounted for Gas (UfG) losses. According to sources, after Peshawar High Court''s verdict in July 2014 the Sui-Northern Gas Pipeline Limited has stopped collection of GIDC from industrial units.
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