GB Cabinet Special Committee Proposes Tax-Free Status for All Goods Imported from China for GB Consumption
The Tajir Ittehad Action Committee has held a 41-day sit-in at Sost, demanding tax exemption for GB traders and an amnesty to clear pending containers.
Gilgit: The Special Committee constituted by the Gilgit-Baltistan (GB) Cabinet to review taxation and trade issues at the Sost Dry Port has rejected two options earlier presented by the Prime Minister’s Committee, declaring them legally untenable under the current constitutional framework.
The Tajir Ittehad Action Committee has been staging a sit-in at Sost for the past 41 days, pressing its two-point agenda: tax exemption for GB traders and the introduction of a special amnesty scheme to clear containers pending at the port.
The Committee, headed by Senior Minister for Law, Parliamentary Affairs and Tourism Ghulam Muhammad, included the Minister for Finance, Minister for Agriculture, Livestock and Fisheries, and the Special Assistant to the Chief Minister on Industries and Disaster Management. Its mandate was to review federal proposals, consult stakeholders, and submit recommendations to the GB Cabinet by 28 August 2025.
Committee Recommendations
After extensive consultations, the Committee concluded that both federal options—tax collection with reimbursement (Option 1) and quota-based exemptions (Option 2)—were not legally tenable for Gilgit-Baltistan, as neither the Sales Tax Act, 1990, nor the Income Tax Ordinance, 2001, have been formally extended to GB. Instead, the Committee advised the GB Cabinet to put forward the following proposals to the Federal Government:
- Implementation of SRO 1193 (8 August 2024): All goods imported exclusively for domestic consumption in GB should be treated as tax-free.
- Special Clearance Desk: A joint desk at Sost Dry Port, staffed by both Federal Customs and GB Government officials, to manage clearance of GB-destined consignments transparently.
- Strict Enforcement: Customs must ensure that exempted goods are not smuggled out of GB for profit. Violators will face strict legal action.
- Resolution of Stuck Containers: The FBR should operationalise the amnesty scheme announced by the Prime Minister to clear the backlog of containers at Sost.
The recommendations will be placed before the GB Cabinet for formal approval before submission to the Federal Government. The move signals a stronger push from GB leadership to assert fiscal autonomy and address long-standing grievances around taxation without representation.
Traders’ Concerns
During stakeholder consultations held on 23rd, 25th, and 27th August, the GB Chamber of Commerce and local traders voiced strong opposition to the federal government’s Option 1 (tax collection with reimbursement) and unequivocally rejected FBR’s regulatory control over GB trade.
Key demands included:
- “No taxation without representation”: Traders cited GB’s constitutional ambiguity and demanded tax exemptions or designation as a special economic zone.
- Regulatory autonomy: Control of GB’s domestic trade should rest with the GB Government, not the Federal Board of Revenue (FBR).
- Infrastructure & process reforms: A customs station in GB for all local consignments, a tribunal to settle disputes within 15 days, and improved facilities at Sost and Karachi ports.
- Tax exemptions: Complete exemption from federal Income and Sales Taxes for GB-based traders.
- Market access: Extension of the border pass up to Urumchi (China) and the creation of an Export Processing Zone in GB.
Background
The Sost Dry Port, established in 1988 and later operationalised through a public–local partnership, serves as the main gateway for Pak-China trade via Khunjerab. Despite its pivotal role, GB has never received a direct fiscal share from the taxes collected there. Federal taxes levied at Sost—including Customs Duty, Regulatory Duty, Sales Tax, and Income Tax—are credited to the Federal Consolidated Fund and disbursed nationally. As GB lies outside the National Finance Commission (NFC) framework, it relies on federal grants and subsidies rather than an earmarked share of port collections.
