FBR Forms Seven-Member Committee to Resolve Tax Dispute in Gilgit-Baltistan

GILGIT: The Federal Board of Revenue (FBR) has established a seven-member high-level committee to address the escalating tax dispute in Gilgit-Baltistan (GB), where traders have been protesting for ten consecutive days.

The protest, led by traders involved in Pakistan-China trade via the Khunjerab Pass, is centered at Sost Dry Port. Demonstrators have blocked the Karakoram Highway — the only land route between Pakistan and China — demanding an end to federal taxes on goods imported from China. They argue that these taxes are unfairly imposed on the people of GB, who should be exempt from such levies.

As a result of the sit-in, cross-border trade and travel have been effectively suspended, leaving thousands of travelers stranded, including a significant number of Chinese nationals. The protesters cite the FBR’s alleged discriminatory policies and delays in clearing imported consignments as major causes of concern.

In response, the FBR issued a notification announcing the formation of a committee tasked with reviewing the grievances of GB residents. Specifically, the committee will examine the application of sales tax, income tax, and federal excise duty on goods imported through Khunjerab Pass for consumption within the region.

The committee comprises top FBR officials, including the Member Customs (Operations), Member Inland Revenue (Policy), Director General (R&A), Chief Collector (North), Chief IR (Policy), and the Secretary Finance of Gilgit-Baltistan.

According to the notification, the committee’s key responsibilities include:

• Assessing the legality and impact of federal taxes on goods consumed in GB

• Designing a transparent mechanism to implement any applicable tax exemptions

• Recommending safeguards to prevent misuse of exemptions

• Identifying relevant HS codes and estimating annual import quantities based on GB’s consumption needs

• Proposing improved customs clearance processes at Sost Dry Port and enforcement mechanisms at Khunjerab Pass to ensure that exempted goods remain within GB

The committee will also consult with local stakeholders to explore alternatives, such as allowing the GB government to collect duties and taxes. A report with findings and recommendations is expected within seven days.

Meanwhile, the situation on the ground remains tense. Trade has ground to a halt, and passengers — including Chinese citizens attempting to return to Xinjiang via the Khunjerab Pass — remain stranded. Some of these travelers have also joined the protest in Sost, demanding immediate restoration of transport services and resolution of the dispute.