GILGIT: The trade between Pakistan and China through Khunjerab Pass has been suspended for the past three days due to a sit-in organised by the Gilgit-Baltistan traders at the Sost dry port against non-implementation of the GB chief court’s decision that had restrained the collection of taxes on goods imported from China through this pass.

The verdict came in response to a plea by the president of the GB Importers and Exporters Association who challenged the collection of income tax, sales tax and additional sales tax from the traders on imported items from China. On July 20, the GB chief court restrained the Federal Board of Revenue (FBR) and Pakistan Customs from collecting these taxes from local traders till the decision of the court as it admitted the case for hearing.

The tax authorities, however, refused to comply with the court order, prompting the traders to stage the sit-in. The protesters announced the sit-in at the gate of the dry port would continue till the implementation of their demands and warned that they would expand the protest to the Karakoram Highway and the CPEC route in Sost.

Their demands included the implementation of the GB court decision, the abolishment of the Pakistan Customs Collectorate in GB, and the implementation of the GB assembly resolution. The local traders should be allowed free delivery of up to four tonnes of commercial goods from China to GB, the protesters said.

Protesters demand implementation of GB court order against taxes on goods imported from China

According to the protesters, the FBR’s policies were against the traders and they would not accept these policies which affected the locals affiliated with the cross-border trade.

GB Importers and Exporters Association President Muhammad Iqbal said the trade activities between Pakistan and China through the Khunjerab Pass had remained suspended for the past several months. He claimed that the incorrect policies of the FBR and the Customs resulted in the suspension of trade between Pakistan and China, adding that thousands of locals had become unemployed for this reason.

Javed Hussain, a former GB assembly member and a businessman, said that Pakistan Customs and the FBR had been collecting “illegal taxes” at the Sost dry port on imported items. He said the protest would be called off if their demands were implemented.

It may be noted that the discontent among GB traders over these taxes has already resulted in numerous strikes since April. In June, the GB legislature also passed a resolution asking the federal government to stop collecting taxes on goods imported from China through the Khunjerab Pass.

Speaking to Dawn, FBR spokesperson Bakhtiar Muhammad – after consulting the Customs Member Ashhad Jawwad – said the GB court passed an interim order without hearing the tax watchdog and allowed the release of consumer goods without charging sales tax and income tax.

He said the government was of the view that the GB court had no legal jurisdiction on federal levies. “Besides, these goods are not for consumption in GB, rather these are transported to other areas of Pakistan, where both these laws are applicable,” he said, adding that a request for an urgent hearing had already been filed with GB court but due to holidays, it would be heard on Aug 5.

The spokesperson said that the FBR legal team would meet today to decide whether to implement the court order or challenge it in the Islamabad High Court.

Published in Dawn, July 29th, 2024