Gas Infrastructure Development Cess
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The Gas Infrastructure Development Cess (GIDC) is a cess or levy introduced by the government of Pakistan for the funding of gas infrastructure projects.[1][2] The cess was applied to industrial sectors such as fertilizers, CNG, and power plants, but not directly to the general public.[3]
Its purpose is to finance the construction and maintenance of transnational gas pipelines, including the Iran–Pakistan gas pipeline, the Turkmenistan–Afghanistan–Pakistan–India (TAPI) Gas Pipeline, and various liquefied natural gas (LNG) projects.[3] The cess has been controversial since it was introduced in 2011 and there have been numerous legal challenges to the law introducing it with large amounts having never been paid.
History
[edit]It was introduced in November 2011 under the Pakistan Peoples' Party government led by Asif Ali Zardari.[3] The GIDC was legislated as a Money Bill on November 25, 2011.[3]
The introduction and implementation of the GIDC were met with legal challenges from various industries, questioning its constitutionality and reasonableness.[3] These challenges led to multiple court cases, including in the Sindh High Court and Peshawar High Court, and eventually escalated to the Supreme Court of Pakistan.[3]
In a significant ruling on June 22, 2014, the Supreme Court declared the GIDC unconstitutional, stating that it could not be introduced through a Money Bill.[3] In response, the government enacted the GIDC Ordinance in October 2014, which was again legally contested.[3] This led to the introduction of the GIDC Act in May 2015, aiming to address the legal issues.[3]
Despite these legislative efforts, the GIDC Act continued to face legal challenges, leading to a series of stay orders against the billing and collection of the cess.[3] This legal contention resulted in the accumulation of unpaid GIDC arrears from its inception in January 2012 until December 2018.[3]
To address the accumulating arrears, the PTI government issued a presidential ordinance on August 28, 2019, which proposed a 50 percent waiver on the GIDC and a 100 percent waiver on accumulated interest, along with a payment plan for arrears.[3] This ordinance targeted sectors including CNG, fertilizers, and power generation, providing them the option to settle outstanding cess amounts under specified conditions.[3]
References
[edit]- ^ Kamran, Asad Ullah (December 12, 2022). "GIDC amounting to Rs448 bn stuck in limbo. What is the GIDC though?". Profit by Pakistan Today.
- ^ "What is GIDC? Here is everything you need to know about the Gas Infrastructure Development Cess".
- ^ a b c d e f g h i j k l m Bhatti, Eleazar (September 9, 2019). "Profit Explains: The GIDC saga". Profit by Pakistan Today.