Mon. Sep 23rd, 2019

GIDC Presidential Ordinance promulgated to waive off billions

Aftab Ahmed

Islamabad: The PTI government has approved GIDC amendment Ordinance 2019 through Presidential ordinance to waive off over Rs 200 billion outstanding against industrial barons.

According to analysts, new Ordinance will have significant positive impact on FSL Fertilizer, Chemical and Steel universe. As per the ordinance, Fertilizer sector (including feed and fuel), captive, KESC, GENCOs and IPPs shall pay half of the outstanding cess levied or charged up to December 31 2018.

This would enhance gov’t collection under the head of GIDC and helps in reducing fiscal deficit. Moreover, this would improve cash flows and profitability of the companies, in our view. We believe FFC, FFBL, EFERT, LOTCHEM, and EPCL to be the major beneficiary of the act, analysts said.

Under Presidential Ordinance, 50 per cent outstanding out of over Rs 450 billion against fertilizer, textile and CNG sectors would be waived off. The existing rate of GIDC on gas being supplied to these sectors would also be reduced by 50 per cent.

Earlier, the cabinet had approved in January this year that fertilizer sector, IPPs, Gencos, KE and general industry including its captive power units will be provided a waiver of 50 per cent in GIDC payable for the period January 1, 2012 to December 31, 2018.It was also decided that GIDC rates for gas used as fertilizer feed stocks paying concession feed gas price will be reduced to zero and GIDC rate for their gas as fuel stock will be reduced by 50 per cent. Similarly, GIDC rates for the gas used as fertilizer feed stock and fuel stock by old fertilizer plants would be reduced by 50 per cent.

GIDC rates for IPPs, Gencos, KE, general industry and its captive power units will be reduced by 50 per cent effective January 1, 2019. GIDC rates for zero rated industry and its captive power units will be reduced to zero. Pursuant to the GIDC Amendment Act 2018, CNG sector’s arrears, GIDC amount for the period January 1, 2012 to May, 2015 were settled at Rs 12 billion as a full and final liability.

For the remaining stations which could not avail this scheme, they may be provided a one- time opportunity to deposit the balance amounts which are payable under the GIDC Amendment Act 2018.The effective date for levy of markup of the GIDC Act 2015 on payable amounts will be taken as January 1, 2019.

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