A LONG queue of container trucks stalled at Sost behind the site of the sit-in blocking the Karakoram Highway.—Photo by writer
A LONG queue of container trucks stalled at Sost behind the site of the sit-in blocking the Karakoram Highway.—Photo by writer

ANY other day and Sost stirs with cross-border trade. This morning, it is listless, the long road running through it empty and silver in the morning sun like a dead snake, belly-up. Vehicles parked on either side slumber and the shops — their size and scale shrunken by the charcoal immensity of mountains around the valley — have shutters drawn. They will go up in slow succession as the morning wears out. But more than the torpor, it is the absence of trade in this distant dry port near the Pak-China border that gives Sost its look of suspended animation.

If customs transaction at Sost is taken as a measure of local stock-exchange, the outlook for border trade — including CPEC-related goods — has turned bleakly bearish in the last two and a half months.

Since the border reopened in April this year, there hasn’t been any trade.

The Khunjerab Pass stays snowed-in for four months through December to March. When it was cleared for traffic in April, traders from Gilgit-Baltistan returned to find the manual customs operations replaced by the digital. Earlier consignments were manually examined by the customs with traders paying tax and duties at the dry port and proceeding to China or Gilgit and onwards. Now they are required to do it in advance through WEBOC — Web-based One Customs, an online system created by the Federal Board of Revenue (FBR) for filing goods-declarations for import and export.

Customs official says 99 per cent of imports through Sost are meant for the tariff area — taxpaying districts in mainland Pakistan

“We’re comfortable with the old system because WEBOC is for industrialists and factory owners,” says Ashfaq Ahmad, a trader in Gilgit. “We are small traders who get supplies from market not factories. Our consignments have multiple products from multiple traders.”

Even a single consignment, then, translates into multiple declarations for numerous goods by several traders, often not tech-savvy and with little access to the internet.

The traders petitioned against WEBOC in the Chief Court of GB — a local high court of sorts. The court ordered the manual one customs to stay. To this, Jawed Agha, the chief collector (North) in FBR, Islamabad, said he was not legally bound to follow orders of the GB Chief Court. Incensed traders in GB reacted by closing down the Karakoram Highway. They say if FBR is not liable “to listen to our high court” then its authority to institute tax-related laws and systems is illegal because GB, due to its disputed status, does not fall in its domain.

Behind the tent, a long queue of 25 trucks snakes through the valley, engines silent. Many more are stranded in Kashgar in China, not moving till the road opens.

Jawed Hussain, a member of the GB Legislative Assembly and an importer of tyres, says the Sost dry port falls in “disputed territory” that has no constitutional status in Pakistan. “There can be no taxation without representation. We can’t follow laws framed in Islamabad because we are not represented in the parliament of Pakistan. We can only follow a policy framed by the local government and traders”.

On a day the border is open, says Hussain, about 10 containers (50 feet each, larger than inland containers that are 40 feet) are cleared daily. It amounts to trade worth Rs1 billion per month and taxes equal to Rs350 million for the same period.

Since the GB traders closed down the border, says Hussain, they have incurred demurrages to the tune of Rs350m on stalled consignments. “We will ask the FBR to pay up. It is because of the federal government that we have suffered losses.”

To the left of the road when facing Pakistan, the land plateaus. Atop this raised flatland, the Chinese built the Sost dry port in 2005. Locals donated land under a contract saying the port revenue would be shared between the Chinese port authorities and the community at the ratio 60:40. Amidst reservations from the community, the ratio was revised to 80:20 this year when the National Logistic Cell took over port operations.

Of late, the port has received CPEC-related “project consignments” — heavy machinery such as dumpers, excavators, hydro-generators, etc. Compared to the two-month stretch by sea, trade through KKH takes only days, making it a preferred route.

In the afternoon, the port is deserted, the emptiness of its wide premises enhanced by absence of trade traffic. Three trucks bearing containers are parked on a side, forgotten.

Ali Asad, the assistant collector customs here, says 99 per cent of imports through Sost are meant for the tariff area: taxpaying districts in mainland Pakistan. “Trade through Sost is not for GB; the traders protesting against taxes and WEBOC are not importers but clearing agents. Importers are based in Karachi and Lahore. Locals ask for tax relief, saying GB is disputed territory but borders are a federal subject where Pakistani (tax) laws apply. ”

Asad says the manual One Custom operations had “loopholes” that made tax evasion possible. “WEBOC ensures check and balance. It is a requirement under the World Customs Organisation (an arm of WTO) and CPEC because as trade expands, we would need speedy clearance and data documentation which is not possible under manual operations.”

With each passing year, there has been 5 to 10pc increase in border trade, says Asad. Manual One Customs take up to four days for documentation, consignments are manually examined and cleared with no central electronic database.

“WEBOC is user-friendly, allowing ‘Green-Channel’ clearance for trusted traders. We are here to facilitate business, not safeguard interests of individuals — therefore the tough stance by the FBR.”

Recently, a multi-party conference from GB was held at Sost. Local political representatives endorsed the traders’ charter of demands, seeking removal of taxes and WEBOC.

It appeared the traders would continue to hold sit-in at Sost, but just a day before Eid, the dharna was called off after the Frontier Corps Northern Areas (FCNA) intervened, meeting the Traders’ Core Committee to reopen the KKH. With the FCNA as a guarantor, the traders were told that the FBR would address their demands by June 20 (Wednesday).

“If it doesn’t happen, we will back on 21st June at the same spot,” says Hussain.

Published in Dawn, June 19th, 2018