Duty-free Chinese imports: Steel sector urges FBR to seek ‘advance pay orders’

ISLAMABAD: The documented steel sector has asked the Federal Board of Revenue (FBR) to take “advance pay orders” from importers of duties/taxes free Chinese goods, cleared from Customs Dry Port Sost, for consumption in Gilgit-Baltistan.

The industry has strongly opposed FBR’s decision to allow duties and taxes free goods from China through the Customs Dry Port at Sost.

Under the alternate arrangement, the industry has proposed allowing such imports through advance pay orders to FBR to be submitted as collateral until “consumption certificates” are submitted by GB tax authorities.

According to a letter of the Pakistan Association of Large Steel Producers (PALSP) to FBR Customs (Secretary L&P), this is to convey our serous concerns regarding S.R.O. 2488 (I)/2025, issued by FBR on December 24, 2025, which outlines customs rules for allowing tax free goods from China through the Customs Dry Port at Sost.

Sost Dry Port: Over 2,403 Chinese goods granted duty & tax relief

Given the frequent misuse of tax waiver, we propose allowing such imports through advance pay orders to FBR to be submitted as collateral until consumption certificates are submitted by GB tax authorities.

Failure to do so may result in serious harm to local industry, as these duty-free goods could be diverted and sold in the taxable areas of the country instead of GB.

To increase economic activity in that area, raw material/scrap may be allowed, but finished and intermediate goods may not be allowed at all. Reason is that such exemptions are mis-used.

Tax exemptions for erstwhile FATA/PATA are still being misused, damaging local industries, especially the steel industry. Pakistan has surplus steel capacity, so GB’s construction steel needs can be met by the local steel industry. Allowing tax-free steel imports could badly hurt the local steel industry.

The industry opposed such tax exemption and urged consultation with local industry before taking any final decision, the association added.

Copyright Business Recorder, 2025