The Gilgit-Baltistan Chief Court declared the income tax, sales tax, and additional sales tax collected by revenue authorities on goods imported from China through the Khunjerab Pass as illegal. On Friday, the court issued an order to stop the Federal Board of Revenue (FBR) and Customs from collecting these taxes.
This ruling came in response to a petition filed by GB Importers and Exporters Association president Muhammad Iqbal through his counsel, challenging the taxes collected at the Sost Dry Port on Chinese goods imported through the Khunjerab Pass.
The petitioners stated that the FBR, through a 1996 notification, had suspended the collection of sales tax on imported goods in GB, and referred to subsequent orders by the GB Council Secretariat in Islamabad, the Ministry of Kashmir Affairs and Gilgit-Baltistan, and the GB law department, which declared the region exempt from these taxes.
The petitioner accused the Federal Board of Revenue (FBR) and Customs of unlawfully collecting taxes in violation of their authority. Following the proceedings, Justice Ahmed issued a brief order and admitted the petition for a regular hearing.
He acknowledged that Gilgit-Baltistan (GB) was indeed exempt from all types of taxes, a matter that has been previously settled in courts. The petition will be scheduled for a hearing after the summer vacation.
Advocate Adnan Hussain, one of the petitioner’s lawyers, informed Dawn that both federal and regional authorities had issued multiple notifications exempting GB from sales tax, income tax, and additional sales tax.
Additionally, the region’s top court has already ruled that GB is exempt from these taxes. Despite these exemptions, the FBR has been unlawfully collecting and deducting taxes from GB traders on imported items from China at Sost Dry Port.
Mr. Iqbal, the petitioner, stated that GB traders were willing to pay customs duty and other taxes, but they will continue their fight against all illegal taxes at Sost Dry port.
The discontent among GB traders over these taxes has led to various strikes and trade activity suspensions in the region since April, with the most recent strike occurring earlier this month.
