Gas consumers will pay Rs100 bn more

ISLAMABAD: Gas consumers will pay an extra Rs100 billion as the National Assembly on Tuesday passed The Infrastructure Development Cess (GIDC) Bill, 2014, envisaging levy and collection of gas infrastructure development cess amid a strong protest by the opposition parties minus the Pakistan People’s Party (PPP).
The PPP had expressed serious reservations over the legislation but later decided to same after the government agreed to accommodate its four amendments.The members of the opposition parties, including Pakistan Tehreek-e-Insaf (PTI), Muttahida Qaumi Movement (MQM) and Jamaat-e-Islami (JI), continued to raise slogans against the government alleging a compromise arrived at between the ruling party and PPP on passage of the bill. “Muk Muka (connivance) Na Manzoor,” they shouted.
The opposition parties termed the cess a taxation in violation of different clauses of the Constitution and against principles of the Federation.The PPP parliamentarians, who, earlier had opposed the bill said they have serious reservations over the bill questioning as to why the issue was not sent to the Council of Common Interests (CCI) and where the billions of rupees collected in previous years were spent.
The bill said: “it was expedient to enact a law with the name of Gas Infrastructure Development Cess,2015 for imposition of cess to meet the gap between gas demand and supply and generate funds for a number of gas import projects and other outstanding amounts payable and sums due to government.
“The cess shall be levied and charged by the federal government from gas consumers other than the domestic sector consumer or the company at the rates as provided in second schedule of the bill.”
Following amendments of the PPP as passed by the National Assembly, the bill would not have retrospective effect and cess would be charged from July 1, 2015.
As per amendment in the second schedule, the cess rate per MMBTU from industrial sector has been reduced from Rs150 to Rs100, for CNG sector from Rs300 to Rs263.56 and Rs200 for CNG Region-I and Region-2 respectively.
The Fertilizer-Feed (old) and Fertilizer-Feed (New), the rate of Rs300 each has been fixed.Talking about the legislation, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said the cess would be utilised by the federal government for infrastructure development of Iran-Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan Indian (TAPI) project or other ancillary projects.
The minister said that the government required Rs1,000 billion maintain its gas system and it also needed to build infrastructure in order meet gap between demand and supply of gas.He assured the house that there would also be oversight of the Parliament over collection and utility of Gas Infrastructure Development Cess (GIDC).
Regarding issue of LNG import, he said so far no contract had been signed in this regard saying that whenever and deal is reached, the facts would also be placed before the house.
Earlier, speaking on the bill, the PPP member Syed Naveed Qamar who later moved three amendments, demanded there should be no retrospective effect of the bill and its rates should also not be increased.
The opposition members including Dr. Arif Alvi (PTI), Dr. Farooq Sattar (MQM), Sahibzada Tariqullah (JI), Shaikh Rashid Ahmad (Awami Muslim League), Aftab Sherpao (Qaumi Watan Party) and others strongly opposed the legislation.
Dr. Arif Alvi said the legislation was violation of the constitution and principles of the federation observing that the Parliament could not take issues pertaining to imposition of taxes like GIDC.
Dr. Farooq Sattar of MQM said the proposed legislation clashes with the Constitution as such taxation could only be imposed in the federal budget. “The PML-N Government is continuously working against the Constitution and federation,” he alleged.
He also asked the Government to change its priorities in the development sector and divert funds allocated for projects like Metro Bus service to plans like Iran Gas Pipeline projects.
Sahibzada Tariqullah of JI said by getting this bill passed, the PML-N Government wanted to implement dictation of IMF. He pointed out that the IMF had conditioned passage of this bill with release of the next instalment of loan. “It seems that the Government has summoned the two-day session of the National Assembly just for this legislation,” he said.
Nawab Yousuf Talpur of PPP said as to why the Government was in a hurry to get the bill passed and for that it did away with private members agenda on Tuesday and took the legislation.
Dr. Nafeesa Shah of PPP said there have tendencies of dictatorship in the Government questioning as to where the previous two years collections in head of GIDC were spent. She said the issue of GIDC should have been routed through the CCI.Aftab Sherpao questioned as to why the Government was reluctant to convening meeting of the National Finance Commission (NFC).