Gas Infrastructure Development Cess: government rebuts rumours to the effect that it has given up stance on legality of Gas Infrastructure Development Cess Act 2011

Islamabad, April 11, 2013 (PPI-OT): The Federal government promulgated the Gas Infrastructure Development Cess (GIDC) Act, 2011 in December-2011. The cess shall be utilized for or in connection with infrastructure development of Iran Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline Project, LNG or other projects or for price equalization of other imported alternative fuels including LPG.

The said Act was further amended through Finance Act, 2012. Many of the consumers approached the Hon’able Islamabad High Court challenging the levy and recovery of the GIDC in its entirety by impugning the constitutionality of the GIDC Act 2011.

The judgment of the Hon’able Single Judge of the Islamabad High Court dated 31.01.2013 had declared the levy and recovery of the GIDC ultra vires the Constitution. The order passed by a Division Bench of the Islamabad High Court in appeal dated 12.03.2013 had suspended the order of the Hon’able Single Judge dated 31.01.2013. Technically, this suspension had reinstated the GIDC Act 2011 and had allowed the recovery of past arrears of GIDC as well as the levy and recovery of GIDC going forward.

The aforesaid Division Bench of the Hon’able Islamabad High Court has now passed a further order on 18.03.2013 on an application filed by a consumer of natural gas whereby the Federation, the gas utility companies and the consumers have been asked to maintain status quo as regards recovery of the ‘disputed amount’ from the consumers as well as regards the payment of refunds to the consumers of the GIDC amount recovered, if any.

If consumers such as CNG stations pass on the GIDC amount to the end consumers then the GIDC amount collected by the stations will be liable to be deposited with the Federation regardless of the ultimate result of the litigation regarding the constitutionality of the GIDC.

In view of above, the federal government hereby rebuts the rumors to the effect that it has given up its stance regarding the legality and constitutionality of the GIDC Act 2011. However, the government reiterates that it will honour the orders of the hon’ble Courts of law whatsoever on the subject.

For more information, contact:
Irfan Ashraf Qazi
Public Relations Officer
Ministry for Petroleum and Natural Resources
Mobile: 0334-4487654
Tel: +9251 921 0220 -9206416
Fax: +9251 921 3180
Email: minister@mpnr.gov.pk