ISLAMABAD, May 28 Asia Pulse - The government is considering a proposal toreduce general sales tax (GST) to 15 per cent from 20 per cent on importsof palm oil and palm olein at the persistent demand of the vanaspati gheemanufacturers, well-placed sources said.

They said that a decision on the matter, expected to be announced in theupcoming budget, would resolve a major issue of withheld refunds betweenthe country's 94 vanaspati manufacturers and the Central Board of Revenue.

The manufacturers are demanding more than Rs1 billion (US$17.3 million) inrefunds from the CBR, which in turn agreed to pay only Rs350 million inrefunds. The row has resulted in a huge amount of withheld refunds afterthe GST was imposed on vegetable ghee and cooking oil as a condition ofthe IMF's Poverty Reduction and Growth Facility for Pakistan.

The tax authorities had collected Rs9 billion as GST on the import of RBDpalm oil and RBD palm olein during the fiscal year 2002-03.