Fertiliser, textile, CNG sectors owe govt Rs400b GIDC

They have already got tax from consumers but are reluctant to deposit in govt coffers

ISLAMABAD: Fertiliser producers, captive power plant owners and compressed natural gas (CNG) filling outlets owe the government Rs400 billion on account of gas infrastructure development cess (GIDC), a big amount which they have kept with them after obtaining stay orders from courts.

They have already collected this tax of Rs400 billion from consumers but have failed to deposit it in government accounts.

During its tenure from 2008-13, the Pakistan Peoples Party (PPP) government had imposed the GIDC on gas consumers including fertiliser producers, captive power plants run by textile mills and CNG stations in a bid to fund the laying of gas pipelines including Iran-Pakistan, Turkmenistan-Afghanistan-Pakistan-India (Tapi) and liquefied natural gas (LNG) pipelines. Later, the Pakistan Muslim League-Nawaz (PML-N) government got over Rs300 billion in GIDC during its 2013-18 tenure but it was not spent on the pipeline projects. The money went to schemes like Metro bus and Orange Line train.

On the other hand, the PML-N government forced public gas utilities to borrow over Rs100 billion from commercial banks for building an LNG pipeline from Karachi to Lahore.

Fertiliser plants, captive power units and CNG outlets did not pay GIDC to the government and obtained stay orders from courts. Now, the outstanding GIDC has accumulated to Rs400 billion.

Officials familiar with the development told The Express Tribune that the fertiliser industry was a major defaulter which was receiving over Rs400 per million British thermal units (mmbtu) in GIDC from farmers on urea supply.

According to the officials, the fertiliser industry, which is getting gas supply at concessionary rates, has so far received Rs120 billion from the farmers on account of GIDC. The industry has also received billions of rupees from the government in subsidies.

Now, the Ministry of Industries has sent a summary to the Economic Coordination Committee (ECC) for giving the fertiliser producers a subsidy of Rs4 billion in order to offset the impact of increase in urea prices by Rs130 per bag following the rise in gas tariffs.

The textile industry is another major defaulter which is running the captive power plants. It is receiving GIDC from the consumers but has not deposited the collection of Rs80 billion in government coffers.

Petroleum Minister Ghulam Sarwar Khan, at a press conference held on Friday, claimed that the industry was involved in massive gas theft. Despite this, the government is going to provide subsidised gas to the captive power plants.

The CNG sector is also receiving billions of rupees from gas consumers on account of GIDC. According to the officials, the CNG station owners and the PML-N government had entered into a deal under which 50% of GIDC was waived for the sector since 2015. However, the CNG outlets still have to pay Rs80 billion in GIDC to the government.

Published in The Express Tribune, December 2^nd, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.