Pakistan allows duty-free import of selected goods into Gilgit-Baltistan via Sost border

Pakistan’s federal government has decided to allow the conditional import and clearance of hundreds of items for Gilgit-Baltistan through the Sost border without the payment of duties and taxes, officials said, in a move aimed at addressing a long-standing demand from the region’s residents.

Under the decision, each consignment will require an online permit issued by an authorized Gilgit-Baltistan government authority through the Customs Computerized Clearance System. The exemption will be subject to an annual quota, with a cumulative cap of 4 billion rupees on sales tax, income tax and federal excise duty in a single financial year.

Once the quota is exhausted, all applicable federal taxes will be levied on goods imported for use in Gilgit-Baltistan, according to the Federal Board of Revenue (FBR).

The tax authority has issued a draft of new rules governing the clearance of goods from the Sost Customs Dry Port and published them in the official gazette for public feedback. Objections or suggestions may be submitted to the FBR within three days of publication and will be considered before the rules are finalized.

In the notification, the FBR said it was exercising powers under the Customs Act of 1969, the Sales Tax Act of 1990, the Federal Excise Act of 2005 and the Income Tax Ordinance of 2001 to frame the proposed mechanism.

The draft rules apply only to specified goods imported through the Silk Route Dry Port at Sost and classified under designated Pakistan Customs Tariff codes. The regulations will take effect immediately upon formal notification.

Sales tax, income tax and federal excise duty will not be charged on eligible imports provided the required online permit is obtained. The importing firm or company must be wholly owned by individuals holding a Gilgit-Baltistan domicile, the draft rules state.

The 4-billion-rupee exemption limit will be monitored through the customs system on a first-come, first-served basis. The Gilgit-Baltistan government will be responsible for ensuring that goods imported under the facility are used strictly within the region.

The rules also empower the collector of customs for Gilgit-Baltistan to temporarily suspend the exemption in the event of disruptions to customs operations due to protests, sit-ins or road blockades. In cases of misdeclaration or movement of goods outside the region, the exemption may be withdrawn and enforcement action taken under existing import laws.