Of undue payments: Stay-order on collection of GIDC arrears issued

Counsel for petitioners asked PHC to declare recovery illegal

PESHAWAR:

The Peshawar High Court has temporarily stayed the order to collect arrears of Gas Infrastructure Development Cess (GIDC) from industrial units and filling stations in K-P, being collected by Sui Northern Gas Pipelines Limited (SNGPL).

The court on Thursday issued the interim relief order after hearing petitions of textile mills association and industrial units which challenged the recovery of the arrears. So far, representatives from around 450 industrial units have approached the high court and have challenged the recovery of arrears.

Earlier, the high court suspended the collection of GIDC from some of the units.

During Thursday’s hearing, Shumail Ahmad Butt, counsel for several petitioners, informed the court the federal government recently passed the GIDC Act 2015. It included Section 8 in it so as to recover arrears for the time period for which the GIDC had been declared illegal.

“Under this act, the federal government has exempted Sindh and Balochistan where such arrears would be collected by SSGPL. However, it has been imposed in K-P and Punjab, which is discrimination,” Butt told the court. He contended the industrial units of K-P were already affected by the ongoing war, and hundreds of those units have shut down. He said these industrial units have been asked to pay around Rs50 billion worth of recovery of arrears.

Butt further added the Supreme Court of Pakistan has pointed out the defects in the law that need to be addressed. He requested the court to declare the recovery of arrears on account of GIDC illegal and unconstitutional.

The bench comprising Chief Justice Mazhar Alam Miankhel and Justice Haider Ali Khan suspended the order of collection and stayed the recovery of arrears on account of GIDC. The court also issued notices to the federal government to respond to the petition.

The petition says K-P produces more than 400 million cubic feet (Mcfd) of gas per day, which is 10% of the total production of gas in the country, whereas its consumption was around 200 Mcfd, roughly 50 % of what it produced.

It added that previously, Ogra had imposed GIDC through the GIDC Act 2011. The government and SNGPL were mandated to collect it from CNG units, industries and other users. The rates of GIDC were later increased by way of Finance Act 2012 and later through the Finance Act, 2014.

It was challenged before PHC, which stopped the government from collecting cess. Afterwards, the SCP dismissed appeals the government filed against the high court verdict as well as review petitions against it.

Published in The Express Tribune, June 19^th, 2015.