( Business Recorder)
The Supreme Court of Pakistan on Thursday issued its much-anticipated verdict in the Gas Infrastructure Development Cess (GIDC) case and ordered the companies to pay Rs417 billion while rejecting their appeals.
As per details, Justice Mushir Alam read the reserved decision made by a three-member bench. The panel rejected the petitions in a 2-1 verdict, ordering the companies to pay the Gas Infrastructure Development Cess.
A three-member special bench, headed by Justice Mushir Alam and comprising Justice Faisal Arab and Justice Mansoor Ali Shah after hearing 107 petitions/appeals of various textile mills, cotton mills, sugar mills, ceramics companies, chemicals, CNG filing stations, match factories, cement companies and aluminum industries regarding GIDC levy for two weeks on February 20, 2020, had reserved the judgment.
“We believe, this will result in total corporate cash outflow of Rs417bn, however, as per our channel checks companies can opt for a review petition after deliberating on legal language of the verdict,” said Topline Securities.
GIDC was imposed by the government back in Dec-2011 to raise funds for development of gas infrastructure in the country.
According to the GIDC Act, the collected amount shall be utilized by the Federal government for Iran Pakistan (IP) gas pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI), LNG, and other ancillary projects.
Topline Securities said that the largest cash outflow would be witnessed from fertilizer companies to the tune of Rs110bn. Fauji Fertilizer will be required to pay Rs63bn (43pc of market cap) followed by Fauji Fertilizer Bin Qasim – Rs22bn (109pc of market cap), Engro Fertilizer – Rs19bn excluding Enven amount (21pc of market cap) and Fatima Fertilizer – Rs6bn (10pc of market cap).
Other companies like Lotte Chemicals, Engro Polymer, Lucky Cement, Century Paper Board, Gul Ahmed, and Feroze Mills would also be required to submit their dues, amongst others.
It is pertinent to former that the former government had imposed the tax of Rs 417 billion while the incumbent regime had waived Rs 220 billion, but then withdrew the waiver ordinance.