The steel sector has demanded that the Federal Board of Revenue (FBR) require importers of Chinese goods cleared duty- and tax-free through the Sost Dry Port for use in Gilgit-Baltistan to submit advance pay orders.
According to sources, the steel industry has strongly opposed the FBR’s decision to grant duty and tax exemptions on goods imported from China via the Sost Dry Port. As an alternative arrangement, the steel sector has proposed that such imports should only be allowed if importers submit advance pay orders to the FBR as a security guarantee. This amount would be retained by the FBR until consumption certificates confirming the use of goods in Gilgit-Baltistan are submitted by the local tax authorities.
Sources said that, in a letter written by the Pakistan Association of Large Steel Producers to FBR Customs (Secretary L&P), the association expressed serious reservations regarding S.R.O. 2488 (I)/2025 issued by the FBR on December 24, 2025, which laid down customs rules allowing tax-free imports from China through the Sost Dry Port.
According to the sources, the industry’s stance is that in view of the repeated misuse of tax exemptions, it is proposed that such imports be permitted only against advance pay orders deposited with the FBR, which would be held as a guarantee until consumption certificates issued by the Gilgit-Baltistan tax authorities are provided.
Failure to implement this measure could cause serious damage to the local industry, as these duty-free goods could be diverted and sold in other taxable areas of the country instead of Gilgit-Baltistan.
To promote economic activity in the region, the import of raw materials (scrap) may be allowed; however, the import of finished and semi-finished goods should not be permitted, as such exemptions are consistently misused. Tax exemptions previously granted to the former FATA/PATA regions are still being misused, causing severe harm to local industries, particularly the steel sector.
Pakistan already has excess steel production capacity, and the local steel industry can easily meet Gilgit-Baltistan’s construction steel requirements. Allowing the import of tax-free steel could seriously undermine the domestic steel industry.
Sources added that the industry has strongly opposed this type of tax exemption and has emphasized that the local industry should be consulted before any final decision is made.
