ISLAMABAD, March 2: The government has constituted a cabinet sub-committee to work out quantum of tax to be levied on export of urea/fertilizer.

The committee comprises ministers for commerce, privatization and petroleum and natural resources, an official source told Dawn on Saturday.

They will prepare a feasibility report to be presented before the next meeting of the Economic Coordination Committee (ECC) for consideration.

Officials said that the committee would chalk out the exact quantity of the tax in consultation with the relevant stakeholders to be applicable on export of urea/fertilizers.

The decision was taken in line with an International Monetary Fund (IMF) conditionalities for getting the poverty reduction and growth facility.

The government is giving around Rs12 to 13 billion per annum to manufacturers of urea/fertilizer as subsidy in the form of subsidized gas billings.

The government would withdraw the subsidy in phases in next two years.

The officials said that since under WTO, the government could not subsidize any exports, therefore, the government was left with no option but to levy export duty on urea/fertilizers till the complete withdrawal of the subsidy.

The government had levied 15 per cent general sales tax (GST) on import and supply stage of all kinds of fertilizers last year.

Similarly, the government had levied 15 per cent GST on urea at the actual price level due to which the price of a bag of 50kg shoot up by Rs20.

The government also considering to levy 15 per cent GST on all kinds of fertilizers at retail and wholesale stages as well.