July 31, 2025
By Rehan Piracha
LAHORE
The traders’ protest at the Sost border in Gilgit-Baltistan (GB) entered its 11th consecutive day on Thursday, as the Federal Board of Revenue (FBR) constituted a seven-member committee to resolve the ongoing tax dispute that has brought trade and travel through the Khunjerab Pass to a halt.
The protest, led by local traders involved in cross-border commerce with China, began in response to what they describe as discriminatory federal taxation policies and the FBR’s failure to clear consignments imported from China. Demonstrators have been blocking the Karakoram Highway near the Sost Dry Port — the main land route connecting Pakistan with China — demanding exemptions from federal taxes, including sales tax, income tax, and federal excise duty on goods intended for consumption within Gilgit-Baltistan.
On July 30, the FBR issued a notification announcing the formation of a committee to address the “tax grievances of the people of Gilgit-Baltistan”. The committee was tasked with evaluating complaints regarding the imposition of federal taxes on imports entering Pakistan through the Khunjerab Pass for use in GB.
Speaking to Voicepk, Muhammad Ali Quaide, Special Assistant to the Chief Minister of Gilgit-Baltistan, said the provincial government had invited protest leaders to nominate representatives for talks with the FBR committee.
“The dialogue process will begin once the traders nominate members of their negotiating team,” he said. “The provincial government will facilitate discussions between the protesting traders and the federal committee.”
Quaide, a member of a separate high-level provincial committee led by Gilgit-Baltistan’s Minister for Interior Shamsul Haq Lone, said that many of the traders’ concerns had already been addressed.
“One of the key demands — exemption from federal taxes on goods consumed within GB — has largely been accepted,” he stated. “However, any goods transported from GB to other parts of the country will still be subject to federal taxation, including sales tax and income tax.”
According to the FBR’s notification, the seven-member committee includes the Member Customs (Operations), Member Inland Revenue (Policy), Director General of Research & Analysis, Chief Collector (North), Chief Inland Revenue (Policy), and GB’s Secretary Finance.
The committee is mandated to evaluate the imposition of federal taxes on imports for consumption within GB; recommend a transparent mechanism for implementing available exemptions; suggest safeguards against the misuse of exemptions; identify Harmonised System (HS) codes and determine annual import quantities needed for local consumption based on per capita metrics; propose clearance and enforcement mechanisms at Sost and Khunjerab to ensure exempted goods are used within GB; consider collection of taxes on behalf of the GB government, and submit its final report within seven days.
The protest has disrupted Pakistan-China trade and stranded thousands of travellers, including many Chinese nationals attempting to return to Xinjiang province through the Khunjerab Pass. Some have joined the sit-in at Sost town, demanding the reopening of the route for cross-border travel.
The deadlock has highlighted long-standing tensions between the federal taxation system and the constitutional status of Gilgit-Baltistan, whose residents have repeatedly demanded tax exemptions due to the region’s lack of representation in Pakistan’s parliament.