REVENUE ADMINISTRATION

SALES TAX DEPARTMENT

SALES TAX IS AN INDIRECT TAX. It has become an important source of revenue and occupies a significant place in the State budget, Its importance can be gauged from the total revenue yield from this tax. It has more than compensated the loss of revenue resulting from the introduction of prohibition. The sales tax was introduced for the first time in the then State of Bombay from 1st October, 1946. It was levied under that Act only at the last stage of sale and was, therefore, known as a single point tax. From 1st November, 1952 a new system was, introduced and this was known as multi-point sales tax. Unlike the single point tax system, tax under the new Act was levied at every stage of sale excepting stages exempted under the provisions of the Act and the rules thereunder. This helped to raise more revenue and to check evasion to some extent. From 1st April, 1954 a new Act was brought into force. The system of the tax under this Act was known as two,-point tax system. Under this system a tax was levied at every stage except when sale is to a dealer holding a licence and/or authorisation. It had thus an element of multi-point tax system.

Current Sales Tax Act.

The Bombay Sales Tax Act, 1959 which came into force on the 1st of January, 1960, is applicable to the entire State of Maharashtra. The new Act embodies the various recommendations of the Sales Tax Enquiry Committee and has repealed and replaced the various Sales Tax Laws in force in the five sales tax regions of the State.

In the initial stages a dealer who holds goods purchased before 1st January, 1960, from a registered dealer in the old Bombay State area will, on the resale of the goods be liable to pay tax under the new Act subject to certain modifications and the benefit of section 8(a) of the Bombay Sales Tax Act, 1953, will not be available to him. Similarly exemption granted under the earlier laws to certain classes of goods generally or conditionally will, in some cases, not be accrued under the new law.

The Bombay Sales of Intoxicants Taxation Act has now been repealed and provisions for the taxing of spirituous medical preparations containing more than 12 per cent, by volume of alcohol (but other than those declared by Government to be not capable of causing intoxication) will now be taxed under the Bombay Sales Tax Act, 1959 at the rate of 30 nP. in the rupee at the first-stage only. Similarly, country liquor and foreign liquor brought in India including spirits, wines and fermented liquors will be taxed at the rate of 45 nP. in the rupee.

Schedule 'A' of the Bombay Sales Tax Act, 1959 lists the exempted goods subject in some cases to conditions and Schedules B to E, the taxable goods. Taxable goods are broadly divided into five classes: (i) goods declared' as important to inter-State trade, taxable only at the first stage (Schedule B, Part I); (ii) goods declared as important to inter-State trade, taxable only on the last sale (Schedule B, Part II); (iii) to other classes of goods taxable at only the first stage of sale (Schedule C); (iv) 9 classes taxable only at the last sale (Schedule D3); and (v) 21 classes specified and all other goods not specified elsewhere in any Schedule, taxable at the first stage and on the last sale and, again, to a very small incidence, at the retail stage.

Classes of Tax.

The tax at the first stage is called the ' Sales Tax' and that on the last sale is called the ' General Sales Tax'. The tax at the retail stage is the ' Retail Sales Tax'. Sales Tax and the general sales tax as the names imply, are payable on sales. However, when a registered dealer purchases goods from an unregistered dealer or from Government he pays purchase tax. When he pays purchase tax, the dealer does not pay the sales tax or the general sales tax on the resale of goods as the case may be. The registered dealer does not become liable to purchase tax if he resells the goods without alteration within three months (6 months in the case of cotton) and in that case on such resale he pays in the routine way, sales tax or general sales tax or both, as may be due. The purchase tax is not a separate tax and is only intended to seal off a loophole for evasion.

Classes of Dealers.

The new Act creates five classes of dealers viz. :—

Registered Dealer.

(1) The Registered Dealer: Every dealer liable to pay tax must obtain a registration; failure to do so is regarded as an offence.

Licensed Dealer.

(2) The Licensed Dealer: Every registered dealer who makes sales annually of more than Rs. 50,000 worth to other registered dealers may obtain a licence, on the strength of which he can make purchases, free of General Sales Tax for resale inside the State. The licensed dealer will thus generally be the wholesaler or semi-wholesaler.

Authorised Dealer.

(3) The Authorised Dealer: Every registered dealer whose sales in inter-State or export trade are more than Rs. 30,000 worth of goods annually or who sells that quantity to another authorised dealer who resells them in inter-State-trade or export may obtain an Authorisation against which he can purchase goods free of all taxes (or at a reduced rate in certain circumstances) for inter-State or export resale either by himself or another Authorised dealer to whom he sells them.

Recognised Dealer.

(4) The Recognised Dealer: Any registered dealer whose annual turnover of sales exceeds Rs. 25,000 of taxable goods manufactured by him may obtain a recognition against which he may make tax-free purchases of goods for use directly in manufacturing taxable goods for sale, save, generally speaking, for goods on which the tax is at the rate of two percent, or less and machinery.

Permit Holder.

(5) The Permit Holder: A registered dealer whose commission agency purchases on behalf of principals disclosed in his books exceed Rs. 30,000 per year, may obtain a permit, on the strength of which he may make purchase tax free or at a reduced rate, in certain circumstances for his principals.

Under the new Act the turnover limit attracting registration is Rs. 10,000 for a manufacturer and Rs. 30,000 for every other dealer. Dealers who are not liable to registration because their turnover has not exceeded the limits specified under the Act but are registered under the Central Sales Tax Act, 1956 will be liable to pay tax under the Bombay Sales Tax Act under conditions specified in the Act,.

Great care is taken to see that the tax as far as possible, would not be recovered more than what is intended in the law. This is done by the set-offs allowed under the law.

Administrative Organisation.

For the purpose of the administration the Sales Tax Officer is the head at the district level who exercises the powers delegated to him under the Bombay Sales Tax Act and Rules for general administration of the Act in his charge. His duties are registering and licensing the dealers; assessing the dealers and making recovery of outstanding taxes through the Revenue Collector and detection of evasion of taxes. He is also empowered to compound certain offences under the Act.

The Sales Tax Officer of the district is subordinate to the Assistant Commissioner of Sales Tax, Central Division, Range III, who looks after general administration of the offices within his Range. In addition to this he is also an appellate authority.

The Assistant Commissioner of Sales Tax of the Range is subordinate to the Additional Commissioner of Sales Tax, Central Division, Bombay, and he is the head and controlling authority in respect of administration of the Division. He is an appellate and revising authority over the Assistant Commissioner of Sales Tax and the Sales Tax Officer. In addition to this he assists the Commissioner of Sales Tax, Maharashtra State, Bombay, who is the head of the Sales Tax Department.

The Sales Tax Officer, Satara district, Satara is in charge of the Satara district. In addition to this for the purpose of convenient administration, Dapoli, Khed, Chiplun and Guhagar talukas from Ratnagiri district are attached to his jurisdiction.

The following table gives for the years noted the amount of sales tax collected in the Satara district and the number of registered dealers:—

STATEMENT SHOWING THE YEAR-WISE SALES TAX RECEIPTS, THE COLLECTION CHARGES AND PROPORTION OF COLLECTION CHARGES TO THE AMOUNT COLLECTED IN SATARA DISTRICT.

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