KARACHI: Collectorate of Customs Appraisement East has officially approached the Federal Board of Revenue (FBR) seeking policy clarification regarding the clearance of goods related to FATA and PATA through the Karachi port under home consumption procedures, following the Peshawar High Court’s recent orders.
In a formal communication to the Member (Customs-Policy) at FBR, Karachi Customs highlighted the complexities surrounding the clearance of goods imported by industrial units located in the erstwhile Federally and Provincially Administered Tribal Areas (FATA/PATA). These regions were merged with Khyber Pakhtunkhwa and Balochistan under the Twenty-Fifth Constitutional Amendment, granting transitional tax incentives to industries operating there.
Initially, complete sales tax exemptions were provided to FATA/PATA industries under SRO 1212(I)/2018 and later through Serial No. 151 of the Sixth Schedule to the Sales Tax Act, 1990. These benefits were conditional upon submission of post-dated cheques and later pay orders as security, verified through consumption or installation certificates.
However, after the Finance Act 2025, these exemptions were replaced by a 10% concessional tax rate under Entry No. 89 of the Eighth Schedule, removing earlier security and verification requirements.
Currently, several industrial units have challenged Customs General Order (CGO) No. 12/2002 (para 117) before the Peshawar High Court, arguing it is no longer applicable under the new regime. The court has granted interim relief, allowing goods clearance directly from Karachi.
Karachi Customs has urged the FBR to review and align existing procedures under CGO 12/2002 with the latest FATA/PATA concessionary framework, ensuring clarity, compliance, and policy consistency across all collectorates.
