The Pakistan Association of Large Steel Producers has urged the Federal Board of Revenue to require advance pay orders from importers of duty-free Chinese steel cleared through the Sost Customs Dry Port for consumption in Gilgit-Baltistan. The industry raised concerns that without proper safeguards, these goods could be diverted to taxable areas, undermining domestic production and disrupting local markets. Officials highlighted that Pakistan’s steel sector has sufficient capacity to meet regional demand without relying on imported finished products.
The call for advance tax guarantees follows the FBR’s notification of S.R.O. 2488(I)/2025 issued on December 24, 2025, which allowed over 2,403 Chinese goods to enter Gilgit-Baltistan duty- and tax-free. Steel producers argued that such exemptions, if not carefully monitored, risk misuse and diversion to other parts of the country where normal duties apply. They warned that failure to regulate imports could harm local industry competitiveness and reduce revenue collection in taxable areas.
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In a formal letter to the FBR, the association proposed that importers submit advance pay orders as collateral, which would be released only after consumption certificates are issued by Gilgit-Baltistan tax authorities. The industry stated that this mechanism would ensure imported steel products are consumed solely within the intended region, preventing illegal resale or smuggling into other markets. Such measures, they argued, are necessary to protect domestic producers from unfair competition.
The steel sector highlighted that Pakistan’s surplus production capacity is more than sufficient to meet Gilgit-Baltistan’s construction steel requirements domestically. Officials recommended limiting duty-free exemptions to raw materials or scrap, while excluding finished and intermediate steel goods due to past misuse of similar concessions in other regions. They stressed that careful regulation is essential to prevent repetition of diversion and revenue loss.
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Furthermore, the industry urged the FBR to engage with local stakeholders before implementing or expanding tax-free import schemes through Sost Dry Port. Producers emphasised that consultation with domestic manufacturers would help design policies that support regional economic activity while safeguarding local industry and ensuring proper fiscal controls. They warned that ignoring such recommendations could compromise the long-term viability of Pakistan’s steel sector.
The steel producers concluded that enforcing advance pay orders and consumption verification is critical to balancing economic growth in Gilgit-Baltistan with national industry protection. Officials called for timely measures to prevent misuse of exemptions and to maintain competitiveness, transparency, and revenue integrity across the steel market.