Cabinet chaired by Prime Minister Imran Khan on Thursday decided to bail out defaulters by waving off Rs 200 billion on account of Gas Infrastructure Development Cess (GIDC).
The fertilizer, textile and CNG were major defaulters of the government which had received over Rs 400 billion from the gas consumers on account of GIDC but refused to pay the government following obtaining stay orders from the courts. The cabinet on Thursday decided to bail out these three major defaulters by waving off 50 per cent outstanding that amounts to Rs 200 billion.
The cabinet also decided to reduce the rates of GIDC for future. Asad Umar finance minister in a press conference said that these sectors would be able to avail the lower rates of GIDC if they implement the deal of waving off 50 per cent outstanding. The reduction in rate of GIDC would result slashing prices of urea by Rs 200 per bag.
At present, CNG, textile and fertilizer industries have obtained stay orders and were not paying bills on account of GIDC to the government meant to spend on building gas pipeline projects. Out of total dues, fertilizer industry is to pay Rs 120 billion, CNG Rs 80 billion and textile industry Rs 80 billion.
During its tenure, Pakistan Peoples’ Party (PPP) had imposed GIDC on gas consumers including fertilizer, captive and CNG to raise funds to execute gas pipeline projects like IP, TAPI and LNG. However, this tax had become controversial as PML-N government did not spend it on building gas pipeline projects. However, PML-N government made it part of the budget and different sectors obtained stay orders from the court.
CNG, fertilizer and textile barons have collected Rs 400 billion from the consumers but they were not paying the government after obtaining stay orders from courts. The PML-N government had waived off 50 per cent money against CNG sector on account of GIDC. During meeting held in Finance Ministry, textile and fertilizer industries had also demanded to treat like CNG sector by waiving off 50 per cent outstanding.