Money matters: Petition challenging gas cess filed in PHC

According to petitioner, industrial units are already paying various taxes

PESHAWAR: A writ petition seeking to get the Gas Infrastructure Development Cess (GIDC) declared illegal was filed in the Peshawar High Court on Monday. Under the GIDC Act, the federal government collects an additional levy from gas consuming companies.

The petition was filed by Swat Ceramics Company Private Limited on behalf of 15 industrial units and 30 CNG pumps through Advocate Shumail Ahmad Butt. The secretary of the ministry of petroleum and natural resources, chief executive of Sui Northern Gas Pipelines Limited (SNGPL), general manager of SNGPL Khyber-Pakhtunkhwa and director general of Oil and Gas Regulatory Authority (OGRA) have been named respondents.



According to the petitioner, industrial units are already paying various types of taxes but under the GIDC Act 2011 the federal government started collected another levy called the gas cess at the rate of Rs13 per million metric British thermal unit (MMBTU).

The petition further states the government made amendments to the GIDC Act through the Finance Act 2012 and thus the rate of cess was increased exorbitantly for industrial consumers from Rs13 to Rs100 per MMBTU.

Moreover, through a notification issued on September 7, 2012, the respondents reduced the rate of GIDC from Rs100 to Rs50 per MMBTU for certain industrial units that produce captive power and fertilizer fuel stock, the petition stated.

“The petitioner and other consumers challenged the levy in the PHC and on June 13, 2013 the court declared the collection of cess constitutionally illegitimate. The court also ordered that the cess collected so far be returned to the consumers as lump sum or adjusted in the monthly bill within six months,” it added.

The respondents then approached the Supreme Court against PHC’s decision. The apex court suspended the high court’s decision which prompted them to begin collecting GIDC once again, the petition read.

It went on to add that through the Finance Act 2014, GIDC rates have again been increased for industrial, fertilizer, fuel stock, CNG and captive power producers’ sectors. On September 24, the federal government yet again promulgated another ordinance, GIDC Ordinance 2014.



The petitioner requested that the petition be accepted so that any past, present or future increases in cess rates under the GIDC Ordinance 2014 can be declared illegal.

For interim relief, the petitioner requested the court to restrain the respondents and their officers from imposing or collecting the GIDC.

Published in The Express Tribune, October 14^th, 2014.