GIDC reduction to provide industries Rs50 billion relief

Govt has slashed the cess rate to 0-50% for different sectors

ISLAMABAD: The government has decided to provide another relief package worth Rs50 billion to the industrial barons by reducing the rate of gas infrastructure development cess (GIDC) effective January 1, 2019.

The current rate of GIDC for feedstock gas supply to old and new fertiliser plants is Rs300 per million British thermal units (mmbtu), gas supply as fuel to fertiliser plants is Rs150 per mmbtu, for captive power plants Rs200 per unit, industry, independent power producers and power generation companies Rs100 per unit, compressed natural gas (CNG) stations in region-I Rs263.56 per unit and in region-II Rs200 per unit.

Sources told The Express Tribune that the government had now decided to reduce the cess rates by at least 50%.

The government had targeted the collection of Rs100 billion in GIDC in fiscal year 2018-19. Of the total, the industrial barons will now be given a relief of Rs50 billion.

Industrial tycoons already have to pay an outstanding Rs410 billion on account of GIDC. Of this, the textile industry is to pay Rs80 billion, fertiliser plants Rs80 billion and CNG outlets Rs80 billion.

The cabinet, in its meeting held on January 24, waived the payment of Rs200 billion out of the arrears. The reduced GIDC rates will be applicable to those sectors which clear the 50% outstanding bills.

Under the relief package, the GIDC rate for feedstock gas for fertiliser plants, which are already receiving concessionary feedstock gas, will be reduced to zero and the rate for fuel gas for these plants will be cut by 50%.

Similarly, the GIDC rate for gas used as feedstock and fuel by old fertiliser plants and CNG stations will be reduced by 50%. The CNG sector has defaulted on GIDC payments. The previous Pakistan Muslim League-Nawaz (PML-N) government waived 50% of GIDC. The current Pakistan Tehreek-e-Insaf (PTI) administration has given another 50% relief besides the reduction in GIDC rate for the sector.

Apart from the CNG stations, the government has given a big relief to the five zero-rated export-focused sectors which include textile, leather, sports goods, surgical instruments and carpet. The rate of GIDC has been slashed to zero for the export-oriented industries. Earlier, the government reduced the gas tariff for them by announcing a Rs25-billion subsidy.

The government has also provided a relief of Rs29 billion to the textile tycoons by waiving all taxes and duties on the import of cotton.

Published in The Express Tribune, February 5^th, 2019.

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