KARACHI: As the industrial sector is looking for availing the legal option of filing review petitions of the Supreme Court judgment in Gas Infrastructure Development Cess, the Federation of Pakistan Chambers of Commerce and Industry has said that implementation of the honorable court decision is mandatory.
Federation of Pakistan Chambers of Commerce and Industry appealed for leniency by government and settlement with the businesses, as the whole industry of the country, which is already facing liquidity crunch in the post-corona slowdown, would be hit massively.
He hinted at some out-of-court settlement to resolve the long outstanding issue of GIDC with a view to releasing the financial stress of the manufacturers, besides helping revive the industrial activities.
In a statement issued, FPCCI President Mian Anjum Nisar observed that all industrial sectors of the country, including fertilizers, cement, textile, CNG, chemical, ceramics, and steel will take a beating due to the GIDC ruling, as the whole industry consumes gas.
He observed that the court verdict will result in massive cash outflows of the already cash-strapped manufacturing sector, which will go bankrupt, as they have to pay Rs417 billion to the government in 24 equal installments, which is not possible for them especially in a post-coronavirus worst economic turndown.
Mian Anjum Nisar said that most of the industrial sectors would see their earnings drop and liquidity adversely affected owing to large cash outflows when the government starts recovering outstanding dues as the stock market index 488-point drop shortly after the verdict also testifies to the industry fears.
This was evident from the market’s reaction to the news. The fertilizer sector, which uses gas as a direct input in production, was in the red zone within minutes of the verdict.
FPCCI President said that the government has also not given any timeline for developing projects for which the levy was imposed and, as pointed out by the honourable court, it didn’t provide for a mechanism of obligations and consequences that might arise if the service is delayed or is not delivered at all.
In case no work is carried out on North-South pipeline within the prescribed time and for laying any of the two major pipelines of IP and TAPI and if the political scenario changes, the purpose of levying cess will be deemed to have been frustrated and the GIDC Act, 2015 would become permanently un-operational and considered dead. What does it mean, whether the industry will get refund after payment of GIDC?
He said that this is worldwide tendency that the civil matters are always avoided to approach court for arbitration.
It is not possible for the industry to pay such a huge amount at a time when the coronavirus pandemic and containment measures have plunged the economy into a deep contraction not only in the country but also globally.