FBR Issues Special Regulatory Order for Tax Relief and Clearance Mechanism for Imports from China to Gilgit-Baltistan
The total fiscal impact of the exemption has been capped at Rs 4 billion per financial year, to be automatically monitored through the customs system.
Islamabad, December 24: Following the approval and directives of the Prime Minister, the Federal Board of Revenue (FBR) has issued a Special Regulatory Order (SRO) introducing a special tax relief and clearance mechanism for goods imported into Gilgit-Baltistan through the Sost Dry Port. The notification has been issued in line with the recommendations of a high-level committee constituted to address long-standing trade, taxation, and cost-of-living concerns in the region
According to the SRO, a special procedure for the clearance of goods from the Customs Dry Port at Sost has been notified under the Customs Act, 1969, Sales Tax Act, 1990, Federal Excise Act, 2005, and the Income Tax Ordinance, 2001. The rules come into force immediately and apply exclusively to imports routed through the Silk Route Dry Port, Sost, for consumption within Gilgit-Baltistan.
Exemption from Sales Tax, Income Tax and Federal Excise Duty
Under the newly notified framework, sales tax, income tax and federal excise duty will not be levied on 2,403 approved items imported through Sost, provided specific conditions are fulfilled. These include mandatory consignment-wise online authorisation through the Customs Computerised Clearance System (WeBOC) by a duly notified authority of the Government of Gilgit-Baltistan.
The SRO further specifies that the importing firms and companies must be solely owned by persons holding a Gilgit-Baltistan domicile, ensuring that the benefit remains restricted to local traders and businesses. The total fiscal impact of the exemption has been capped at Rs 4 billion per financial year, to be automatically monitored through the customs system.
Quota-Based and Region-Specific Application
The tax relief will be extended by the Collector of Customs on a first-come, first-served basis within the approved quota. Imports exceeding the allocated quota or goods brought for consumption outside Gilgit-Baltistan will be subject to the normal levy of taxes and duties.
To prevent misuse, the SRO makes it mandatory for the Government of Gilgit-Baltistan to ensure that all goods cleared under this regime are used exclusively within the territorial limits of the region. Strict enforcement and monitoring mechanisms have also been outlined.
Safeguards and Enforcement Measures
The notification empowers customs authorities to withdraw the exemption in individual cases involving mis-declaration or diversion of goods outside Gilgit-Baltistan. The Chief Collector of Customs (Enforcement) has been tasked with taking appropriate measures to prevent leakage of goods into other parts of the country.
In addition, the Collector of Customs, Gilgit-Baltistan, has been authorised—after consultation with the provincial government—to temporarily suspend the tax exemption in case of disruptions to customs operations due to protests or road blockades, ensuring operational control and compliance.
Extensive List of Essential Goods Covered
The SRO includes an extensive schedule of PCT codes, covering 2,304 items such as food grains, fruits and vegetables, livestock and dairy products, fertilisers, medicines, construction materials, fuel, household goods, and other essential commodities. The list will be reviewed and adjusted periodically by the FBR to align with local needs and trade patterns.
Implementation of High-Level Committee Recommendations
Officials say the notification represents the formal implementation of the high-level committee’s recommendations, approved by the Prime Minister, aimed at easing the cost burden on the people of Gilgit-Baltistan, regularising border trade, and ensuring transparency and predictability in the taxation regime at the Sost Dry Port.
The move is being viewed as a significant policy intervention to support local traders, stabilise prices of essential goods, and strengthen the economic linkage of Gilgit-Baltistan with cross-border trade routes, while maintaining strict regulatory oversight.
Read the SRO and Complete List of Approved Items : CUSTOM SPECIAL SRO FOR GB
