Islamabad, December 30, 2025: The Federal Board of Revenue (FBR) on Tuesday sought to allay concerns raised by traders, stakeholders, and trade bodies regarding the proposed procedure for granting federal tax exemptions on goods imported for exclusive consumption in Gilgit-Baltistan (GB), stating that a comprehensive and tightly monitored framework has been put in place to prevent misuse.
In an official clarification, 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 region. In light of this status and following representations from the GB government and local traders, the federal government agreed that imports through the Sost Dry Port meant solely for consumption within GB would not be subject to these taxes at the import stage.
To ensure fiscal discipline and protect the interests of traders and businesses elsewhere in Pakistan, the FBR imposed a strict annual cap of Rs4 billion on tax-exempt imports for Gilgit-Baltistan.
The tax authority outlined several safeguards to operationalize the policy in a transparent and effective manner. Under the mechanism, the Government of Gilgit-Baltistan will allocate trader-wise quotas for tax-free imports, ensuring that the cumulative value remains within the approved annual ceiling.
Pakistan Customs, functioning under the FBR, has introduced a dedicated module in the Web-Based One Customs (WeBOC) system to register, debit, and monitor these quotas in real time. Once a trader’s quota is fully utilized, the system will automatically block further tax-exempt imports, and all applicable taxes will be levied in accordance with the law.
The FBR said the GB government has formally committed to ensuring that goods imported under the exemption regime are consumed strictly within the territory. In addition, Pakistan Customs has developed enforcement measures to prevent the movement of exempted goods from Gilgit-Baltistan to other parts of the country.
Strict penalties will apply in case of violations. Any diversion of tax-free goods outside GB will result in cancellation of trader quotas, confiscation of goods, and, where necessary, a reduction in the overall exemption limit.
The FBR also clarified that as the Customs Act, 1969 is applicable to Gilgit-Baltistan, all imports through the Sost customs station will continue to be subject to customs duties, including regulatory and additional customs duties, regardless of their intended use.
Reiterating its commitment to transparency and fair competition, the FBR said the framework is technology-driven, enforceable, and designed to prevent revenue leakage. It assured the business community nationwide that the exemption regime would not adversely affect legitimate trade or market competition.
The FBR emphasized that the policy is a targeted facilitation measure intended solely to support the people and economy of Gilgit-Baltistan, while safeguarding national revenue and the interests of traders across Pakistan.
