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ISLAMABAD: The Federal Board of Revenue on Monday sought to allay concerns raised by traders and business bodies over the proposed non-levy of federal taxes on goods imported for exclusive consumption in Gilgit-Baltistan, saying a robust and technology-driven mechanism has been put in place to prevent misuse and protect the interests of traders in the rest of the country.
In a statement, the FBR said Gilgit-Baltistan enjoys a special constitutional status, under which key federal tax laws — including the Sales Tax Act, 1990, the Income Tax Ordinance, 2001, and the Federal Excise Act, 2005 — have not been extended to the territory. In view of this status and representations from the GB government and local traders, the federal government agreed that imports through the Sost Dry Port meant solely for consumption within Gilgit-Baltistan would not be subject to these taxes at the import stage.
However, to ensure fiscal discipline and prevent diversion of tax-free goods to other parts of the country, the FBR said a strict annual ceiling of Rs4 billion has been imposed on such imports.
Under the arrangement, the Government of Gilgit-Baltistan will allocate trader-wise quotas for tax-exempt imports, with the cumulative limit not exceeding the approved cap. Pakistan Customs has developed a dedicated module within the WeBOC system to register, debit and monitor these quotas in real time. Once a trader’s quota is exhausted, the system will automatically block further tax-free imports and applicable taxes will be charged in accordance with the law.
The FBR said the GB government has formally committed to ensuring that goods imported under the exemption regime are used strictly within the territory. In addition, Pakistan Customs has devised enforcement measures to prevent the movement of exempted goods from Gilgit-Baltistan to other regions.
Any violation of the agreed framework, including diversion of tax-free goods, will invite strict penal action, the statement said. Such measures include cancellation of trader quotas, confiscation of goods and, where necessary, reduction of the overall exemption limit.
The FBR clarified that while sales tax, income tax and federal excise will not be levied on eligible imports for GB consumption, all applicable customs duties will continue to be collected, as the Customs Act, 1969 stands extended to Gilgit-Baltistan. These include customs duty, regulatory duty and additional customs duty on all imports cleared through the Sost Customs Station.
Reiterating its position, the FBR said the exemption regime was a targeted facilitation measure aimed at supporting the people and economy of Gilgit-Baltistan, and would be implemented with strict monitoring to safeguard national revenue and ensure fair competition for traders across Pakistan.
