No (ex)cess: PHC extends stay over GIDC collection

Petitioners request time to reply to comments filed by Ministry of Petroleum and Natural Resources.

PESHAWAR:

The Peshawar High Court (PHC) on Tuesday extended the stay it earlier issued against the collection of Gas Infrastructure Development Cess (GIDC) from CNG filling stations and industrial units of Khyber-Pakhtunkhwa (K-P) till January 21, 2015.

The extension was granted by a bench comprising Chief Justice Mazhar Alam Miankhel and Justice Syed Afsar Shah during the joint hearing of several petitions filed against the GIDC Ordinance 2014.

A panel of lawyers comprising Isaac Ali Qazi, Muhammad Yasir Khattak and Arshad Ali told the court the Ministry of Petroleum and Natural Resources has filed its comments in the instant case. They requested the court to grant them some time to file a rejoinder, which was approved.



The bench then extended the stay till January 21, 2015 till which time the Sui Northern Gas Pipeline Limited (SNGPL) will not be able to collect the cess.

Barred

On October 15, a bench comprising CJ Miankhel and Justice Malik Manzoor Hussain suspended an order of the federal government regarding the GIDC and restrained the authorities from the collection of cess from industrial units and CNG stations.

During the previous hearing, Shumail Ahmad Butt, counsel for the petitioners, said the act was challenged in the PHC and declared as null and void. The court had ordered the government to return the money collected from consumers through bill adjustments or lump sum payment. The same order was endorsed by the Supreme Court in August 2014.

“No meetings of the Senate or National Assembly were held during September and the Gas Infrastructure Development Cess Ordinance 2014 was imposed by the government in order to escape repayment of collected money which was already declared illegal,” the court was told.

Raising money

The GIDC was earlier levied by the federal government through the GIDC Act 2011 with the objective of funding different development projects like the Iran-Pakistan (IP) gas pipeline project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, LNG import project and LPG supply enhancement project.

The petition added industrial units were already overburdened with various types of taxes but the federal government introduced yet another cess at the rate of Rs100 per MMBTU of natural gas, which was later reduced to Rs50 through a notification issued on September 7, 2012 and now stands at Rs13.

It stated that through the Finance Act 2014, GIDC rates had already been increased for the industrial sector, fertiliser, fuel stock, CNG and captive power producers, yet the federal government promulgated another ordinance on September 24, 2014 and increased the tax burden significantly.

Published in The Express Tribune, December 3^rd, 2014.