Dr. Ikramul Haq
Since Customs Act stands extended to GB, all the duties under said act (Customs Duties, Regulatory Duties, Additional Customs Duties etc.) will be collected on all imports through Customs Stations Sost, regardless of intended use. FBR reiterates that these measures collectively provide a strong, technology driven, and enforceable framework to prevent leakage or misuse of tax-exempted goods. The business community and traders across Pakistan are assured that the exemption regime is carefully designed, closely monitored, and will not harm fair competition or legitimate trade interests in the rest of the country—FBR’s Press release of December 30, 2025
What is unfolding in Gilgit-Baltistan (GB) today is not a technical dispute over customs procedures or tax exemptions. It is a perpetual constitutional crisis disguised as fiscal administration. The Federal Board of Revenue’s insistence that the Customs Act “stands extended” to GB and that all duties will be collected at Sost Customs post “regardless of intended use” is emblematic of a deeper malaise: the exercise of sovereign power without constitutional validity, and governance without citizenship.
This is not how constitutional democracies function. It is how emperors or dictators behave even when a country has a written constitution. The Supreme Court of Pakistan in Civil Aviation Authority v Supreme Appellate Court,Gilgit-Baltistan and others [PLD 2019 Supreme Court 357], while referring to Article 257 of the Constitution of Islamic Republic of Pakistan [“the Constitution”] noted: Therefore there can be no prejudice to Pakistan’s position on the plebiscite issue if the men, women and children living in GB are guaranteed basic human rights and a role in their own governance within a framework of a constitutional nature. Indeed, full rights for the people of GB can only bolster Pakistan’s case for the right of self-determination for all the people of Kashmir.
It is unfortunate that even after lapse of 78 years and clear judgements of the higher courts, the residents of GB are deprived of their fundamental rights and are for decades are victims of highhandedness of FBR.
The constitutional position is clear. Article 1(2) of the Constitution of Islamic Republic of Pakistan [“the Constitution”] defines the territory of Pakistan. Gilgit-Baltistan is not yet included in it. This omission is not accidental, nor has it been cured by any constitutional amendment comparable to the 25th Constitutional Amendment that absorbed the former federally and provincially administrated tribal areas (FATA/PATA) into the federation, and extended federal laws passed by Parliament by omitting Article 247 of the Constitution.
GB’s governance continues to rest on executive orders and administrative arrangements, not constitutional incorporation. This single fact has far-reaching consequences. Federal laws apply by default only within the territory defined by Article 1(2) of the Constitution, or otherwise the state must show a constitutionally valid mechanism for extension. Administrative assertions, circulars, or press releases cannot substitute for constitutional competence. Yet this is precisely what FBR has attempted to do—assert extension by declaration.
GB Chief Court Order of July 2024
The constitutional fiction created by FBR collapsed when, on July 20, 2024, Gilgit-Baltistan Chief Court restrained Pakistan Customs from collecting income tax and sales tax on goods imported for local consumption through the Sost Dry Port and declared its very presence as unlawful.
The GB Chief Court recognized what the federal executive prefers to ignore: these federal tax laws were never validly extended to GB, and therefore their enforcement in the said territory lack legal authority.
The order of Chief Court of GB goes far beyond the immediate relief it has granted to traders. It confirms a constitutional principle: federal fiscal authority does not arise from administrative convenience. It arises from constitutional inclusion or lawful extension, in the absence of either, enforcement becomes ultra vires.
FBR’s highhandedness and unconstitutional acts in GB can be exposed by a simple example: if an investor in GB wants to establish a manufacturing concern to export fruit juices and other products after value addition, why should the company pay customs and other duties and taxes on even capital goods alone worth Rs. 5 billion, ordered from China through Sost.
In its Press release FBR has observed: “However, to ensure fiscal discipline and prevent misuse, a strict annual ceiling of Rs. 4 billion has been imposed on the goods imported for GB under this arrangement”. This ceiling has neither any economic rationale, nor any legal sanction. It, nevertheless, exposes FBR’s mindset that it is not a revenue collecting entity but a growth-slayer!
FBR’s Exemptions, Without Authority
The FBR on January 1, 2026 notified through SRO 01(I)/2026 ‘clearance of goods from Customs Dry port at Sost’ rules, introducing “special procedures” at Sost Dry Port, and exempting over 2400 Chinese-origin items from sales tax, income tax, and federal excise duty. When these laws do not apply to GB, what is the authority to grant exemption? Customs control with the presence of Collector of Customs stationed in GB by FBR is a fatal contradiction as highlighted in the order of Gilgit-Baltistan Chief Court. Unfortunately, this order, like many others of even Pakistani courts, is violated with impunity by the FBR.
If federal tax laws do not lawfully apply to GB, on what basis does FBR grant exemptions from those very laws? This was the question before the Gilgit-Baltistan Chief Court
If GB lies outside the constitutional command of Pakistan, what is the legal status of Pakistani customs officers operating there at all? An exemption presupposes jurisdiction. One cannot exempt what one has no authority to impose.
When Customs Office Itself Is Illegitimate
The Collectors of Customs are not advisory figures. They are statutory officers exercising coercive powers under the Customs Act, 1969 within defined territory. Their authority is territorially bounded. Where the Constitution does not extend, neither can the office.
If Gilgit-Baltistan is not part of Pakistan under Article 1(2) of the Constitution, then the presence of a “Collector Customs, Sost” is constitutionally indefensible unless the state first demonstrates a valid legal bridge extending the Customs Act—and the office it creates—to GB.
No Statutory Regulatory Order (SRO) can perform that miracle. Delegated legislation cannot cure constitutional absence. By continuing to post Collectors Customs in GB, the state is not administering law; it is normalizing illegality through repetition. It is well-established legal rule that what cannot be done directly cannot be done indirectly.
The above legal tangle clearly establishes that all the actions of FBR and customs authorities are coram non judice. The superstructure built on unlawful foundation cannot sustain
Customs Control Is Sovereign Power, Not Technical Service
There is a dangerous tendency to trivialize customs as a technical border function. It is not. Customs control is an assertion of sovereignty. Declaring customs stations, appointing officers, prescribing clearance procedures, and imposing conditions are all exercises of state power over territory and people. To exercise that power without constitutional inclusion is to govern without consent.
Post-colonial ‘Recolonization’
This brings us to the uncomfortable but unavoidable frame: post-colonial re-colonization. Colonial governance was marked by a familiar triad—rule without representation, taxation without citizenship, administration without constitutional obligation.
Gilgit-Baltistan today fits this description with unsettling precision. GB’s people are expected to: (a) comply with federal regulatory regimes; (b) submit to customs controls and conditional clearances and (c) accept the authority of federal officers. GB residents are compelled to do all these acts while being denied: (i) representation in Parliament, (ii) inclusion under Article 1(2) of the Constitution and (iii) equal constitutional citizenship.
This is not federalism. It is administrative colonialism—governance by notification rather than by consent.
The Indian Occupied Kashmir Contrast
The contrast with India’s approach to Occupied Jammu and Kashmir after August 2019 is instructive, even if politically uncomfortable. India revoked the region’s special status and declared it a Union Territory—an act all freedom-lovers and advocates of self-rule rightly criticize. Yet from a constitutional standpoint, India claimed to have opted clarity over ambiguity. It redefined the territory’s status within its constitutional framework and extended federal laws accordingly.
Pakistan, by contrast, has opted for permanent limbo: control without ownership, authority without responsibility. This ambiguity weakens our legal position internationally and erodes legitimacy domestically. The so-called experts giving advice to those who matter in the Land of Pure should study in detail the illegal act of Modi and file a case in International Court of Justice, rather than forcing the people in GB not to import goods worth more than Rs. 4 billion!
Economic Costs and Strategic Damage
The consequences of constitutional inaction are not abstract but concrete. It is forcing economic uncertainty for GB businesses subjected to arbitrary conditions. Creating legal instability, as courts intervene sporadically against executive overreach. Causing political alienation of a population that has repeatedly demanded integration, not exception. It is the main cause of strategic incoherence in a region central to China Pakistan Economic Corridor (CPEC) and regional connectivity. A state cannot indefinitely demand compliance while denying belonging and ownership.
FBR Cannot Impose “Conditions” on GB Businesses
FBR’s claim that it may impose conditions on GB traders—even where taxes are exempted—is constitutionally untenable for three reasons: (1) No territorial competence: GB is not part of Pakistan yet; (2) No valid extension: Federal tax laws and the Customs Act 1969 lack a constitutionally valid extension to GB and (3) No lawful office: Collectors Customs in GB lack jurisdiction ab initio. Conditions imposed by FBR without constitutional footing are void, not merely irregular.
The Only Sustainable Solution: Citizenship First
There is only one principled way forward. Pakistan must accept the legitimate, long-standing demand of the people of GB to be declared full citizens of Pakistan. This requires making GB province after resolution by GB Assembly and through constitutional amendment; and thereafter their full representation in the National Assembly and Senate. This alone will justify application of federal laws. Anything less perpetuates a colonial relationship incompatible with Pakistan’s constitutional ethos.
Conclusion
SROs cannot substitute for constitutional command. Exemptions cannot replace equality. Administration cannot stand in for citizenship. Gilgit-Baltistan does not need more “special procedures”. It needs recognition. The era of ruling without inclusion must end.
Re-colonization through administration is not governance; it is abdication of constitutional responsibility. If Pakistan wishes to exercise authority in Gilgit-Baltistan, it must first extend citizenship, representation, and constitutional dignity. Only then will customs posts, trade regulation, and fiscal policy carry moral and legal legitimacy. Until that day, every notification issued, every condition imposed, and every tax collector posted in GB will remain a reminder not of state capacity—but of constitutional failure and extreme fiscal high-handedness.
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Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.