• Annual relief capped at Rs4bn on 2,403 items; waivers limited exclusively to local traders, firm
• Strict penalties mandated if exempted goods are moved elsewhere
GILGIT: Prime Minister Shehbaz Sharif on Wednesday approved recommendations from a high-level committee to exempt income tax, sales tax, and federal excise duty on goods imported from China through the Khunjerab Pass by residents of Gilgit-Baltistan (GB).
Following the directive, the Federal Board of Revenue (FBR) issued a Statutory Regulatory Order (SRO) to implement the measures immediately.
The decision follows an agreement reached after week-long negotiations in Islamabad between traders’ representatives and a committee headed by Federal Minister for Energy Awais Leghari.
Traders in Gilgit-Baltistan had staged a sit-in during August and September, pressing authorities for tax exemptions, the clearance of consignments stuck at the Sost Dry Port, and the withdrawal of legal cases.
Under the deal, the federal government has capped the tax exemptions at Rs4 billion ($14.4 million) annually on 2,403 items imported for local consumption. The exemptions will be reviewed every two years.
The Prime Minister’s Office issued an official notification on Tuesday endorsing the committee’s recommendations and directing the FBR to submit a compliance report within seven days.
According to the SRO, the rules for the clearance of goods from the Customs Dry Port at Sost apply effectively immediately.
The notification states that “sales tax, income tax and federal excise duty payable on imports covered under this notification shall not be levied” provided the goods are imported through the Silk Route Dry Port, Sost.
To qualify, importing firms and companies must be “solely owned by the persons who hold domicile of Gilgit-Baltistan,” according to the order.
The concessions are subject to strict monitoring. The agreement stipulates that any attempt to smuggle exempted goods outside the region will lead to a “partial or complete withdrawal of the concession”.
The Chief Collector of Customs (Enforcement) is tasked with ensuring goods cleared under the notification remain within Gilgit-Baltistan.
The exemptions will be managed through a quota system.
“The benefit of non-levy of sales tax, income tax and federal excise duty shall be extended by the Collector of Customs on First Come First Serve basis within the approved quota limit,” the SRO stated. Any goods imported beyond the 4 billion rupee fiscal year limit will be subject to standard tax levies.
Shahid Jan, the GB Customs collector, told Dawn that a digital portal has been developed to handle the clearance of goods.
“Traders and all stakeholders will be trained for clearance of the goods through the portal,” Jan said.
Jan noted that other demands from the protesters, including the release of stuck consignments, have been addressed following a decision by the Customs Tribunal Islamabad.
Local traders and civil society groups welcomed the prime minister’s approval.
Proponents said the move would enhance economic opportunities for local entrepreneurs, youth, and the many residents, including transporters, hotel owners, and labourers, whose income depends on trade activities between Pakistan and China.
Published in Dawn, December 25th, 2025
