New GIDC rates for various sectors

New GIDC rates for various sectors

The government has finalised new rates of Gas Infrastructure Development Cess (GIDC) for different sectors of the economy to be applicable from Tuesday (today). Official sources told Business Recorder here on Monday that the government had decided to impose Rs 300 per MMBTU GIDC on all the fertiliser plants, adding that prior to the current decision Fatima Fertilizer and Engro Fertilizer’s new urea plants were exempted from the levy, but now these plants will also pay GDIC at the rate of Rs 300 per MMBTU.

“The new GIDC rates have been notified in the Finance Act, 2014 and Gas Utility Companies will start collection of GIDC from all segments of the economy, as per new rates from Tuesday,” an official of the Petroleum Ministry said. Sources stated that the decision was taken with the sole purpose to generate Rs 140 billion from gas consumers, which would be utilised on construction of Liquefied Natural Gas (LNG) terminals and other gas import projects including Iran-Pakistan (IP) Pipeline Project and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

According to officials, the proceeds from GIDC are being deposited to Federal Consolidated Funds (Account-1) under a sub-account No 003916 allotted by Controller General of Accounts. According to section 4 of the GIDC Act, 2011, the proceeds from the cess will have to be used for a specific purpose. The cess shall be utilised for or in connection with infrastructure development of the IP Pipeline Project, the TAPI Pipeline Project, LNG or other projects or for price equalisation of other imported alternative fuels including LPG.”

The government on January 1, 2014 increased the rate of GIDC on Industrial sector from Rs 50 per MMBTU to Rs 100 per MMBTU which now has further been increased by Rs 50 per MMBTU from Rs 100 per MMBTU to Rs 150 per MMBTU and on fertilizer sector from Rs 197 per MMBTU to Rs 300 per MMBTU.

The government has increased GIDC for Captive Power Plants (CPPs) from Rs 100 per MMBTU to Rs 200 per MMBTU, for CNG stations across the country has been fixed at Rs 300 per MMBTU, which previously was charged at Rs 200 in region-II, consisting of Punjab and Sindh provinces, and for Khyber Pakhtunkhwa (KPK) and Balochistan along with Potohar region from Rs 264 per MMBtu to Rs 300 per MMBTU. Domestic and commercial consumers would continue to be exempted and the GIDC on other consumers to remain unchanged. The power companies, like WAPDA, KESC and IPPs would be charged Rs 100 per MMBTU as GIDC.