Prime Minister Imran Khan, in a statement issued on Wednesday, announced the government's decision to withdraw the Cess exemption for Gas Infrastructure Development (GIDC) revealed last week, allowing Large companies get a 50 percent discount to settle past gas bills in 90 days.
"An ordinance was issued with the objective of recovering fifty percent of the revenue stuck through an out-of-court settlement after consulting with the industry," said the Prime Minister's Office brochure.
"However, in view of the recent controversy, the prime minister, for the sake of transparency and good governance, has decided to withdraw said ordinance," he added.
The attorney general has been asked "to file an urgent hearing request in the Supreme Court, so that the matter is decided as soon as possible, strictly in accordance with the law and the Constitution."
According to the statement of the prime minister's office, the total amount in dispute in the GIDC litigation from January 2012 to December 2018 is approximately Rs 417 billion.
"In the first round of litigation, the Supreme Court was pleased to annul the GIDC statute. The petition for review by the federal government was also rejected by the Supreme Court. Subsequently, new lawsuits were presented, which are currently being challenged before the higher courts provincial and a set of appeals is also pending in the Supreme Court, "said the brochure.
However, the prime minister warned people that taking the matter to court "carries a risk because the decision could go in any direction."
This means that the entire amount in dispute could be fully recovered or lost, with the government "possibly renouncing any prospect of raising future revenue under this heading."
In addition, the government would have to bear the burden of administering refunds of Rs 295 billion of the principal amount, the statement said.
The controversial resignation
The PTI government had enacted a presidential ordinance on August 27 for the out-of-court settlement of a Rs420bn GIDC dispute with industries. The ordinance allowed the industry in general, the fertilizer sector and the CNG sector to pay 50 percent of their outstanding invoices within 90 days in advance and obtain a 50 percent discount on future invoices whenever they withdraw their cases judicial.
The Special Assistant to the Prime Minister on Petroleum, Nadeem Babar, had said that the government expected net income of between 150 and 160 billion rupees under the proposed amnesty, provided that all interested parties made use of the government's offer.
The minister had said that the 50-piece discount offered to the industry through the ordinance was not something new, since the previous government had reached an agreement with the CNG industry on the same lines in March 2018.
Babar had said the government would never have opted for this if there were no multiple orders of suspension in the higher courts for years and there was no final decision in sight.
Also, he said, the government had received only 15 percent of the billed amounts and the remaining 85 percent was stuck in court.
But the government had been under pressure since the exemption was announced to allow a 50 percent discount without a prior audit.
Following consultations among members of the federal cabinet, the law ministry was ordered to consider an amendment to the ordinance to ensure a forensic audit before extending the lucrative amnesty of Rs210bn to large companies.
Now the matter will be dealt with by the Supreme Court, as indicated in the pamphlet of the Office of the Prime Minister.