ISLAMABAD, April 3: The ministry of finance has decided to postpone the levy of general sales tax (GST) on cooking oil and vegetable ghee to avoid public anger.

Well-placed sources told Dawn on Wednesday that in anticipation of strong public and industry reaction, the government “has been compelled” to delay the levy, as this would have come hard on the heels of recent slapping of GST on all kinds of drugs, urea and fertilizers.

According to the sources, an ordinance to this effect had already been prepared, which was due to be promulgated by the end of March.

Meanwhile, Riaz Ahmed Malik, the CBR chairman, told this correspondent on being reached that the major tax exemptions on essential goods will have to be withdrawn in phases. He, however, said there was no time-frame fixed for the same which could be done at any time

The government had accepted the IMF’s conditionality to levy 15 per cent GST on pharmaceuticals, edible oils and electricity before March-end in order to get the next tranche of poverty reduction and growth facility (PRGF).

It appears that President Gen Pervez Musharraf has been well advised to delay, at least for the time being, the decision of levying fresh taxes on consumer goods as this could create resentment among the masses and go against his future plans.

“This might have created problems in getting the favour of people in the success of referendum plan,” the sources said.

The International Monetary Fund (IMF) has reportedly allowed the higher ups at the ministry of finance to extend the date of GST levy till the time the circumstances become conducive for doing so.

A top finance ministry official, on condition of anonymity, told Dawn that GST on cooking oil and vegetable ghee will be announced in late July.