Ministry of Energy is likely to submit a proposal to the Economic Coordination Committee (ECC) of the Cabinet for recovery of Rs 12 billion Gas Infrastructure Development Cess (GIDC) from CNG sector.
Sources said that CNG stations have been collecting cess on CNG sale price in accordance with the notification issued by Oil and Gas Regulatory Authority (Ogra) but a significant portion of it was not deposited to the Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for its onward payment to federal government due to various courts stay/restraining orders.
The GIDC was levied around Rs 62 billion on sale of gas from January 1, 2012 to May 22, 2015, which included Rs 42.8 billion of SNGPL and Rs 19.8 billion of SSGCL. The SNGPL collected Rs 13.4 billion GIDC and SSGCL Rs 6.3 billion, while there was an outstanding amount of Rs 42.9 billion during the period under review. The outstanding amount included Rs 29.4 billion of SNGPL and Rs 13.5 billion of SSGCL.
The Ministry of Petroleum & Natural Resources and Finance Division held discussion with CNG sector to formulate a mutually agreed way forward and both sides have agreed that CNG sector will pay half of the cess payable from January 1, 2012 to May 22, 2015. However, on the GIDC accrued post-GIDC Act 2015 (after May 22, 2015) there would be no relaxation and full amount will be recovered from the sector.
The Ministry of Petroleum and Finance Division also agreed to the recommendations of the Senate standing committee that approximately Rs 12 billion along with total collection of Rs 19 billion will be half of the total GIDC accrued during the period.
Sources said if approved, a bill will be introduced in the Parliament to further amend the GIDC Act 2015 to provide for agreed dispensation to CNG sector. It is also purposed that the markup on delayed payment of GIDC will be payable with effect from the date of promulgation of the proposed amendments instead of July 1, 2015.
As the GIDC collection through the gas companies has not been up to the mark and, therefore, it has also been envisaged to evolve a mechanism to assign the collection of cess through Federal Board of Revenue (FBR) or any other institution, as appropriate, for which the proviso may be inserted in the GIDC Act, 2015.
They added that the summary for collection of the GIDC from CNG sector was circulated and the comments from Finance Division have been received. However, comments from Law Division and Ogra are still awaited. Upon receipt of the comments, the summary will be submitted to ECC of the Cabinet for consideration.
The summary regarding Gas Infrastructure Development Cess (recovery from CNG sector) was submitted to the Cabinet for consideration and the decision of the cabinet is still awaited. The federal government has imposed GIDC in connection with infrastructure development of Iran-Pakistan Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project, LNG or other ancillary project.