LAHORE – SALMAN ABDUHU - The textile industry has said that the government has reduced Gas Infrastructure Development Cess (GIDC) for the whole industry, including steel, cement, processing, fertilizer and IPPs, not just for the textile industry with a view to make them competitive in the region.

The whole industry was opposing the government decision and moved the court, taking stay order against the imposition of the GIDC, as government had collected nothing under this head in July, said the All Pakistan Textile Mills Association (APTMA) former chairman and group leader Gohar Ejaz, while talking to The Nation.

He said the APTMA is the only association, which is ready to pay the Cess on the condition that government should start the physical work in this regard to end energy crisis. “If government initiates the development work, the textile industry will pay even more,” Gohar said.

He said that the government had introduced Gas Infrastructure Development Act in 2011 with a Cess of Rs13/MMBTU, which was increased to Rs100/MMBTU in the Finance Bill of 2012-13. The industry at large opposed the arrangement and demanded the government of reducing it to Rs50/MMBTU. The government agreed to the demand and reduced it accordingly as per the industry demand, he added.

He said APTMA was never the only association asking for reduction in GIDC and there is no reality in the matter that only textile industry has pursued the government in reducing GIDC. He said the government would be able to collect Rs14 billion per annum against Rs2 billion per annum earlier from industry for the development of gas supply infrastructure to augment energy supply. He expressed the hope that GIDC rationalization would reduce the cost of doing business of industry and there would be no loss to the exchequer as such due to the fact that this Cess is being collected for a particular purpose of developing gas supply infrastructure to import gas under TAPI and IPI projects besides importing LNG by the government. He said the objective of this arrangement is to overcome energy shortage and revival of impaired capacities of industry in the country.

Also, he elaborated that the government was collecting Rs149/MMBTU with an option of collecting GIDC from transport sector up to Rs300/MMBTU. So far as unfound gas (UFG) is concerned, this phenomenon has shot up after unchecked expansion of gas supply to the transport sector, he added.

Gohar said the textile industry is the backbone of Pakistan economy, contributing as biggest job provider and 60% share in country’s exports besides developing backward linkages in the agriculture sector. He said APTMA has been voicing the concerns of whole industry in every meeting on the subject and therefore government has extended it to the whole industry.

He said it is also a fact that textile industry has been the prime victim of energy crisis, as energy is 40% of the conversion cost therefore APTMA has to lead from the front in order to protect production, employment and exports of the country.