GILGIT: The Federal Board of Revenue (FBR) on Wednesday formed a seven-member committee to make recommendations for resolving the ongoing tax dispute, as traders in Gilgit-Baltistan (GB) continued their sit-in for a tenth consecutive day.

Traders, affiliated with Pakistan-China trade through Khunjerab Pass, have been protesting at the Sost Dry Port and blocking the Karakoram Highway, the land route between Pakistan and China, demanding an end to what they call federal taxes on goods imported from China.

The protests, which have paralysed trade and travel through the Khunjerab Pass, began over what traders describe as discriminatory FBR policies and the non-clearance of consignments imported from China.

Protesters are demanding exemption for GB residents from paying sales tax, income tax, and other federal taxes on goods imported from China.

Pakistan-China trade and travel suspended; thousands of travellers stranded, including Chinese nationals

In response, a notification issued by the FBR announced the committee’s formation to addr­ess the “tax grievances of people of Gilgit Baltistan”.

According to the notification, the committee will “evaluate the grievances of the people of Gilgit-Baltistan (GB) on the issue of charging of sales tax, income tax and federal excise duty on import of goods from China through Khunjerab Pass for consumption in Gilgit-Baltistan.”

The seven-member committee comprises the member customs (operations), member-IR (policy), director general (R&A), the GB secretary of finance, the chief collector (north) and the chief IR (policy).

The committee’s mandate is to examine the levy of taxes on goods meant for consumption within GB’s territorial jurisdiction.

It is also tasked with devising a “transparent implementation mechanism” for any available exemptions and suggesting “robust checks against misuse of any exemption”.

Additionally, the committee will identify the HS codes and quantify the annual quantities needed for local consumption within GB, keeping in view per capita import of such goods for the rest of the country.

It will also consider mechanisms for clearance of baggage at Sost and enforcement measures at Khunjerab Pass to ensure consumption of exempted goods in GB only.

The committee will consult with local stakeholders to weigh different options, including the collection of duties and taxes on behalf of the GB government, and is expected to submit its report within seven days.

Due to protests, thousands of passengers scheduled to travel to China through Khunjerab Pass remain stranded as transportation via the pass has been suspended for a third day.

Many Chinese nationals who planned to travel to Xinjiang province through Khunjerab Pass have also staged a protest sit-in in Sost town, demanding to be allowed to travel.

Published in Dawn, July 31st, 2025