The US military says it is cancelling $300million (NZD$450m) in aid to Pakistan over what it calls Islamabad's failure to take action against militant groups.
The Haqqani Network and the Afghan Taliban have launched attacks in Afghanistan that have killed USA forces, and U.S. officials have long argued that Pakistan, and specifically its ISI intelligence service, provides safe havens to them.
The Department of Defense is now awaiting the decision of the US Congress on its plan to cut aid to Pakistan and channel it elsewhere, Faulkner said.
They said the Pentagon's decision showed the U.S., which has being demanding Pakistani action for years, is ramping up the pressure on the strife-torn country's security apparatus.
The US considering suspension of the CSF is likely to further strain the US-Pak relationship, which comes ahead of US Secretary of State Mike Pompeo visit to Islamabad.
The Coalition Support Funds - which the Pentagon is now proposing to cut - were part of a broader suspension of aid to Pakistan announced by President Donald Trump at the start of the year.
Shah apprised USA was not giving any aid rather reimbursing Pakistan's expenditures incurred in WoT under Coalition Support Fund.
Earlier he told the BBC Urdu that the U.S.in principle should pay back the money to Pakistan because it was spent for a common objective to defeat militancy and create peace and stability. "The DoD will have a congressional response before September 30, 2018, to allow the DoD to implement the reprogramming actions", the spokesman said.
A Pakistani official, speaking on the condition of anonymity, said he was unaware of a formal notification of the US decision on assistance but said one was expected by the end of September.
Pakistan could again be eligible next year for CSF.
Sameer Lalwani, co-director of the South Asia programme at the Stimson Center think tank in Washington, said: "It is a calibrated, incremental ratcheting up of pressure on Pakistan". He had accused the Pakistan of bundle of lies and cheating the US.
Khan's newly elected government is grappling with whether to seek a bailout from the International Monetary Fund (IMF) or alternatively deep-pocketed allied nations such as China.
PM Imran is well known for his criticism of USA military policy in Afghanistan, but he said after winning elections that he seeks better relations with the United States after a series of aid cuts and the suspension of U.S. military training. Pathankot attack happened after PM Narendra Modi returned from Pakistan, but when Sidhu returned from Pakistan and some nok-jhonk (bickering) took place, the message from my friend came that "we want peace". In his victory speech, he said he wanted "mutually beneficial" relations with Washington. The US aid cut-off has come on the heels of Iranian Foreign Minister Javad Zarif's warm visit to Pakistan in which the latter emphasised its support for Iran and the nuclear deal that the US unilaterally pulled out of.