Controversial GIDC ordinance withdrawn

The federal government on Wednesday decided to withdraw the Gas Infrastructure Development Cess (Amendment) Ordinance 2019, which was promulgated by President Arif Alvi. A statement issued by the Prime Minister's Office stated that "in view of the recent controversy, the Prime Minister, in the interest of transparency and good governance, has decided to withdraw the said ordinance and direct the attorney general to move an application for urgent hearing in the Supreme Court so that the matter is decided at the earliest, strictly in accordance with the law and Constitution."
The total amount stuck in the GIDC litigation from January 2012 till December 2018 is about Rs 417 billion. In the first round of litigation, the Supreme Court was pleased to annul the GIDC statute. The federal government's review petition was also dismissed by the Supreme Court. Thereafter, fresh legislations were brought about, which are presently under challenge before the provincial high courts and a set of appeals has also been pending in the Supreme Court.
In the above backdrop, the Prime Minister's Office explains that an ordinance was issued with a view to recover 50 percent of the stuck revenue by way of an out-of-court settlement after consultation with the industry.
"However, the Prime Minister wishes to inform the nation that going to the court carries a risk because the decision can go either way. This means that the government can get the whole amount or can lose it all and possibly forgo any prospects of future revenue collections under this head. Also on top on this, the government can be saddled with the burden of administering refunds of approximately Rs 295 billion of the principal amount," the statement said.
On Tuesday, Prime Minister Imran Khan took notice of Rs 208 billion waiver to fertilizer and other sectors on account of GIDC. Chairing a meeting of the federal cabinet here, the Prime Minister directed Minister for Power Omar Ayub Khan and Special Assistant on Petroleum Nadeem Babar to come up with an explanation in this regard.
He directed them to try to remove ambiguity surrounding the GIDC waiver and explain to the people why this tax was written off for the fertilizer sector.
During the Senate session, the legislators from two mainstream opposition parties, Pakistan Muslim League-Nawaz (PML-N) and Pakistan People's Party (PPP) as well as smaller political groups including Jamaat-e-Islami (JI) shared unanimity in their views that President Alvi is "habitually" issuing ordinances.
In early 2018, the Parliament passed an amendment to the GIDC Act 2015, in which CNG sector was given a 50 percent waiver against the amount of GIDC from January 2012 to May 2015 prior to the approval of the GIDC 2015 Act. The government at that time did not settle the issue of past dues for other sectors.
Through the presidential ordinance, the PTI government waived Rs 208 billion worth of liabilities of various sectors of economy out of Rs 416 billion in addition to writing off late payment surcharge for the past seven years.