Inside Financial Markets

GIDC passed amid protest

lng lineGIDC passed amid protest

The National Assembly on Tuesday passed “The Gas Infrastructure Development Cess Bill, 2014″ amid a strong protest from the opposition members belonging to Pakistan Tehreek-e-Insaf (PTI), Muttahida Qaumi Movement (MQM) and Jamaat-i-Islami (JI).

Pakistan People”s Party (PPP) women members criticised the government on the passage of the Bill, but all the members of the party supported the Bill during a vote as their minor amendments were incorporated in it. The House adopted four amendments moved by Syed Naveed Qamar.

However, the members of all opposition parties severely criticised the Pakistan Muslim League-Nawaz (PML-N) government for presenting the “Gas Infrastructure Development Cess (GIDC) Bill, 2014” in the House and urged that it should be presented in Council of Common Interest (CCI) for consultation with the provinces before its passage. They said that it is in violation of Articles 153, 158 and 161 (a) of the constitution.

The members of PTI, MQM and JI stood up when Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi tabled the Bill in the House for its passage. The opposition members raised slogans “bargaining on part of Sindh unacceptable, bargaining on part of Khyber Pakhtunkhwa unacceptable, the Bill is unacceptable.” The members continued their sloganeering while the bill was passed clause by clause.

According to clause-4 of the Bill, “(1) The Cess shall be utilised by the Federal Government 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 equalisation of other imported alternative fuels including LPG or for such other purposes connected therewith as determined by the Federal Government.

(2) An annual report with respect to the utilization of the Cess shall be laid before the both Houses of Parliament after three months of ending each fiscal year.”

According to clause three relating to Levy of Cess, “1) The Cess shall be levied and charged by the Federal Government from gas consumers, other than domestic consumers or the company at the rates as provided in the Second Schedule to this Bill.”

According to the second schedule of the Bill, the maximum rate of Cess in various sectors are; (1) Fertilizer-Feed (Old) Rs 300/MMBTU, (2) Fertilizer-Feed (New) Rs 300/MMBTU, (3) Fertilizer-Fuel Rs 150/MMBTU, (4)Captive Power Rs 200/MMBTU, (5) Industrial Rs 100/ MMBTU, (6) KESC/GENCO Rs 100/MMBTU, (7) IPPs Rs 100/MMBTU, (8) CNG Region-1 Rs 263.56/MMBTU and (9) CNG Region-2 Rs 200 /MMBTU.

Earlier, Dr Arif Alvi of PTI said that the government is bringing it in emergency in the House for its passage. “It should have been presented in the CCI. The federal government is violating the Articles-153, 158 and 161 (a) of the Constitution,” he said.

Dr Farooq Sattar of MQM said that it is a finance bill and the government should present it alongwith the budget-2015-16. “It is violation of Articles- 77 and 158 of the Constitution. It should be presented in the CCI because the federal government cannot impose any tax on natural resources (Federal Legislative List -2) without the consultation of provinces,” he claimed.

Dr Nafisa Shah of PPP said that the GIDC should be discussed in CCI. She said that her party has serious objections on the Bill. She said that tax is being imposed through this bill for the last two years. She said that this law would affect the industries of the country.

Syed Naveed Quamar said that there are many weaknesses in the Bill. Unfortunately, “we introduced this law for Pakistan-Iran Gas Pipeline Project but we could not start it. We have proposed some amendments to the Bill,” he said.

While responding to members, Federal Minister for Petroleum and Natural, Resources Shahid Khaqan Abbasi said that the government requires Rs 1000 billion annually to maintain and improve gas infrastructure in the country.

He said that Rs 100 billion would be collated annually through this levy and it would be used for gas infrastructure. He said that no province is self-sufficient in gas. He said that the production of gas is 4 BCFD and demand is 8 BCFD. He said that it is very necessary to fund some important projects. He said that TAPI is a Rs 1 trillion project but our share is of Rs 100 billion.

He said that the collection amount of GIDC would not be misused and the parliament would oversee it.

The Minister said that the CCI itself says that the GIDC does not come into its domain and federal government should settle it. He said that Supreme Court has already decided that it is not a tax but a cess. He said that he has no objection on the amendments proposed by the PPP

Ahsan Baig

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