The Federal Board of Revenue (FBR) has announced a tax exemption for Chinese products imported for use in Gilgit-Baltistan via the Customs Dry Port in Sost, exempting them from sales tax, income tax, and federal excise duty.
The exemption, effective immediately, has been formalized through an official notification that outlines a specific procedure for clearing eligible imports from China. Over 2,403 Chinese products, identified by their respective Pakistan Customs Tariff (PCT) codes, qualify for this tax relief.
Under the procedure, imports will remain tax-free only if an online consignment-wise authorisation is obtained through the Customs Computerized Clearance System. This authorisation must be issued by an authorised representative of the Government of Gilgit-Baltistan in the designated system format.
The notification specifies that tax exemptions will be applied by the collector of Customs on a first-come, first-served basis within the allocated quota. Imports exceeding the quota will be subject to applicable sales tax, income tax, and federal excise duty. The Government of Gilgit-Baltistan is responsible for ensuring that all goods imported under this exemption are used exclusively within the region.
To prevent misuse, the notification includes measures to stop tax-exempt goods from being transported outside Gilgit-Baltistan. In cases where Customs operations are disrupted due to protests or road blockages, the collector of Customs, in coordination with the Gilgit-Baltistan government, may suspend the exemption.
Furthermore, the collector of Customs holds the authority to deny exemptions in cases of significant misdeclaration that could trigger legal action under the Customs Act, 1969, or if goods cleared under the exemption are moved outside the region.
The FBR will also implement a special procedure to distinguish, monitor, and clear goods imported via Sost for consumption in other parts of the country from those eligible for the Gilgit-Baltistan exemption.
All relevant provisions under the Imports and Exports (Control) Act, 1950, the Import Policy Order, and the Customs Act, 1969, will continue to apply to all imports through Sost, regardless of their intended destination.
