The association requested that importers be required to provide an advance payment order, and that such guarantees only be released after the local tax authorities issue a consumption certificate.
The industry’s reaction came after FBR issued SRO 2488(I)/2025 on 24 December 2025, allowing over 2,403 Chinese-origin products to be imported through Sost exempt from customs duties and VAT. Steel producers emphasized that this exemption increases the risk of diversion outside Gilgit-Baltistan and potential fiscal abuse.
In the letter to FBR, the association stated that without proper protective mechanisms, the steel sector could face significant harm. It highlighted that Pakistan already has excess steel production capacity and that Gilgit-Baltistan’s demand for construction steel can be easily met by domestic producers.
Industry representatives also argued that if regional economic activity is the goal, duty exemptions should be limited to raw materials and scrap rather than finished or semi-finished products. They reminded authorities of past cases where similar incentives were misused in other regions and emphasized that such mistakes should not be repeated.
Steel producers stressed that before implementing or expanding duty-free import programs via Sost Dry Port, FBR must consult with local stakeholders to ensure market stability is maintained.
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