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The domestic fertilizer industry has reportedly expressed reservations on the GIDC amendment Ordinance 2019, recently promulgated by the federal government, saying that GIDC settlement has triggered controversy.

This issue is expected to come under discussion at a meeting with the Prime Minister's Advisor on Commerce, Textile, Industries and Production, Abdul Razak Dawood and representatives of fertilizer industry on Monday (today). Another meeting purely on GIDC issue has been convened on Tuesday. In a letter to Secretary Petroleum and Natural Resources, Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) stated that the industry, during a series of meetings held at MOIP chaired by Advisor Industries and attended by representatives of Petroleum Division, had raised its concern on the draft Ordinance with regard to its application as agreed by Finance Minister with the industry during a meeting on January 10, 2019.

According to the FMPAC, the industry had agreed to absorb the impact of gas price increase with effect from 1st July 2019 on assurance by the government that GIDC reduction will be applicable from the same date.

The Council argued that the Ordinance does not address the concerns of the industry as enunciated in minutes of meeting issued on August 9, 2019. Therefore, the spirit of the amendment is likely to be defeated, as it appears to be discriminatory, besides raising undesired controversies with regard to its non-applicability, for a certain period (1 Jan 2019 to date of promulgation).

"Advisor Abdul Razak Dawood has been let down by bureaucracy which was callous in follow up of his commitment," said one furious stakeholder.

The FMPAC has submitted the following for consideration and necessary action to facilitate implementation of the Ordinance to accrue the envisaged benefit to either party: (i) GIDC (amendment) Ordinance 2019 section 3(6) allows payment of half of the outstanding, cess levied or charged up to Dec 31, 2018. However, it was agreed by the then Finance Minister during the meeting on 10th Jan 2019 that 50% waiver shall be applicable to the total amount chargeable/levied under various GIDC Ordinances/Acts as applicable from time to time.

The fertilizer industry has proposed that in order to be fair to those who have paid more than the others, the amount paid by the industry be duly adjusted against 50% of total amount charged/levied to the industry; (ii) the Ordinance covers the period up to 31st Dec 2018 for application of the concession, while prospective reduction of rates is believed to take effect from the day of promulgation of GIDC Amendments - 2019. Thus the intervening period shall become disputed, resulting in heavy losses to the industry which has already absorbed the gas price impact since 1 July 2019, on assurance by the Government. Recovery of losses through revision of prices may become inevitable, if not addressed through the requisite notification.

The industry further says that the Ordinance is silent on applicability of mark up as enunciated earlier in section (3) GIDC amendment Act 2018. The amendment to this effect needs to be inserted to take effect from date of commencement of the Ordinance.

"We have requested the government that fertilizer industry's concerns should be addressed through notification/legislation, as deemed appropriate, to avoid unnecessary delays / reluctance in execution of the Ordinance," said Executive Director FMPAC, Brig Sher Shah Malik (Retd.).

The government has waived about Rs 208 billion of different industries due as GIDC arrears.

Copyright Business Recorder, 2019

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I did graduation from the Government Murray College Sialkot and MSc in Psychology from the University of Punjab. I am in journalism since 1990. I worked in Daily Nawa-i-Waqt as sub editor and staff reporter in Daily Pakistan and Daily Din prior to joining Daily Business Recorder. I have been associated with this newspaper since 2000 as staff reporter. Energy Sector, Commerce / Trade and Industries are key areas of my interest. I have also the credit of exposing number of scams like Rental Power Plants (RPPs), LNG, sugar import, etc.