GILGIT: The high-altitude Khunjerab Pass connecting Pakistan and China remained closed for trade for the eighth consecutive day on Friday as traders in the northern Gilgit-Baltistan (GB) region protested against federal government taxes on imports from China.
On June 22, the Gilgit-Baltistan Assembly unanimously approved a resolution demanding that the federal government stop collecting taxes on goods imported from China through the Khunjerab Pass.
On July 20, the Gilgit-Baltistan Chief Court declared the collection of income tax, sales tax, and additional sales tax by Pakistani revenue authorities on these goods as illegal.
Since July 26, scores of traders have been holding a sit-in at the Sost dry port near the Khunjerab Pass, accusing authorities of not implementing the GB Chief Court’s order. The protest has disrupted immigration procedures and halted trade activities at the border.
Khunjerab Pass, the highest paved international border at over 4,600 meters (15,000 feet) above sea level, links Pakistan’s GB to China’s Xinjiang province.
Imran Ali, president of the GB Chamber of Commerce and Industry, said traders had tried to negotiate a solution with officials many times over the past month, but to no avail. “Now, after symbolic protests for a month, we have been staging sit-ins for the last seven days,” Ali told a Arab News last day. “GB and Kashmir have special status, and the government cannot collect taxes from GB on goods imported from China.”
Bakhtiar Muhammad, a spokesperson for Pakistan’s Federal Board of Revenue (FBR), said the GB court had issued an interim order last Saturday without hearing the FBR, allowing the release of importers’ goods without charging sales tax and income tax as these taxes were not applicable in GB. “The federal government’s view is that the GB court has no legal jurisdiction over federal levies. Besides, these goods are not for consumption in GB; they are transported to other areas of Pakistan where these laws are applicable,” he said.
The FBR has called a meeting of its lawyers and officials on Monday to decide whether to implement the GB court’s decision or challenge it in the Islamabad High Court, according to Muhammad.
According to the Trade Development Authority of Pakistan (TDAP), 96 percent of Pakistan-China trade consists of China’s exports to Pakistan, while Pakistan’s share of exports to China is only 4 percent. The main items imported from China into Pakistan are electronic items, shoes, garments, and spare parts, while Pakistan exports gemstones, dry fruits, medicinal herbs, and some clothing items to China.
Protesters have demanded the government close the customs collectorate in GB and ensure free delivery of trade goods from China to local traders dealing in baggage. “If our demands are not fulfilled, our next step will be to block the Karakoram Highway, and all CPEC-related activities will be suspended,” Ali warned, referring to the multi-billion-dollar China-Pakistan Economic Corridor project.
