Tax or fee: Request to vacate GIDC collection stay turned down

High court extends stay directive for another six months

PESHAWAR: The Peshawar High Court has turned down the federal government’s request to vacate the stay ordered against the collection of Gas Infrastructure Development Cess (GIDC) from industrial units and filling stations of Khyber-Pakhtunkhwa.

The stay was further extended for another six months. The directives were issued by a division bench comprising Justice Waqar Ahmad Seth and Justice Asadullah Khan Chamkani.

Missing targets

The government had submitted the application in order to replenish its kitty for various gas extraction projects.



Additional Attorney General Syed Attique Shah informed the court a target of Rs145 billion was set by the government for GIDC collection and the court’s stay order has affected it. He said through the new cess, the government aimed to fund various gas development projects in the country that will in turn make cheap gas available to all consumers. He requested the court to vacate the stay so GIDC collection could be resumed.

Class action

Counsel for over 500 petitioners, Shumail Ahmad Butt said Sui Northern Gas Pipeline Limited (SNGPL) imposed the cess which was suspended by the Supreme Court of Pakistan. The federal government issued notices to industrial units and filling stations to pay their GIDC arrears. He requested the court to extend the already granted stay, he added.

Upon hearing the arguments, the court extended the stay for another six months and turned down the federal government’s plea to vacate it.

On October 15, the high court suspended the interim order of the federal government and restrained SNGPL from collecting the cess. Later the federal government introduced another bill of the GIDC Act 2015 and started collection which was again stayed on June 17.

“Under this act, the federal government has exempted Sindh and Balochistan where such arrears would be collected by Sui Southern Gas Pipeline Limited. However, it has been imposed in K-P and Punjab, which is discrimination,” Butt told the court in a previous hearing. 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 were asked to pay around Rs50 billion worth of recovery of arrears.

Published in The Express Tribune, July 7^th, 2015.