ISLAMABAD: Nearly two weeks before the announcement of federal budget, the government has called an emergency session of the National Assembly on Monday and extended the Senate session for another three days to give legal cover to the controversial Rs145 billion tax on gas.

The Gas Infrastructure Development Cess (GIDC) Bill, 2014, is part of the National Assembly’s agenda for Monday’s sitting.

Also read: GIDC: ‘the govt should step back’

After presentation of a report on the proposed law by chairman of the house committee Chaudhry Bilal Ahmed Virk, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi will move the bill.

The passage of the bill will enable the government to have an access to about Rs100bn lying in its account under the head of the GIDC.

The government had set a target of Rs145bn GIDC collection for the current financial year.

The cess was initially announced by the PPP government in 2011, but it was challenged in courts and the Supreme Court had ruled that such a cess could not be collected through the finance bill.

The PML-N government imposed the tax through an ordinance in September last year.

The ordinance said: “Notwithstanding any omission or anything to the contrary contained in the Gas Infrastructure Development Cess Act, 2011 (XXI of 2011) or the rules made thereunder, or anything to the contrary contained in any decree, judgment or order of any court the cess levied, charged, collected or realised by the company from gas consumers under the aforesaid Act shall be deemed to have been validly levied, charged collected or realised under the provisions of this Ordinance.”

The petroleum minister at a news conference had said the court had not rejected the cess, but ruled against it on technical grounds.

The ordinance was challenged in courts and the Peshawar High Court barred collection of the GIDC, declaring it a “fee”. The apex court upheld the PHC’s decision and ruled that it would not pass any observation on the validity of the ordinance as the matter is pending before the Islamabad and Lahore high courts.

The finance ministry is keeping the money collected as GIDC under a separate head.

On Jan 16, the National Assembly extended the validity of the ordinance for another 120 days till May 22. Later, the government laid the ordinance before the assembly in the form of a bill and the house committee on petroleum and natural resources passed it in February with a majority vote.

The GIDC was reportedly imposed to collect funds for various gas projects, including Iran-Pakistan gas pipeline project. The government officials had reportedly admitted that the cess was being imposed to fulfil the commitment with the International Monetary Fund.

Sources told Dawn that the decision to convene the emergency assembly session was taken after Prime Minister Nawaz Sharif got an assurance from PPP Co-chairman Asif Ali Zardari last week that his party would not oppose the bill.

When contacted, Minister of State for Parliamentary Affairs Aftab Sheikh said he was unaware why the government had convened the session on Monday. “I was in Attock when I received a call from the Prime Minister’s Office, asking me to move a summary to the presidency for summoning the session which I did through the secretary.”

Talking to Dawn, Leader of the Opposition in the National Assembly Syed Khurshid Shah criticised the government for convening the session without prior intimation to him.

When asked if the PPP would support the bill, Mr Shah said he had called a meeting of the party’s parliamentary group on Monday to discuss the issue.

Published in Dawn, May 18th, 2015

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