Sales Tax is the most important source of revenue to the State as it contributes to the exchequer much more than any other head of revenue. In 1962-63, it yielded 30.38 crores of rupees.

The Bombay Sales Tax Act (LI of 1959) which governs the levy and collection of sales tax replaced on January 1, 1960, the earlier Act which was in operation till then. Different systems of sales tax were in operation in different component parts of the State under the earlier Acts. Under the Bombay Sales Tax Act, 1959, a system which combined the two point levy in respect of certain goods with a single point levy at first stage in respect of the same goods and single point levy at the penultimate stage of the sale by the licensed dealer to a dealer without licence, was introduced. For the ordinary registered dealer holding neither authorisation nor licence, recognition or permit and who obtained his requirements on payment of tax to other registered dealers, retail sales tax on sales of certain goods at per cent of the turn-over of sales of such goods was introduced.

Tax structure: The turn-over for registration in the case of a manufacturer or importer of goods into the State of Maharashtra for liability to register and pay tax is fixed at Rs. 10,000 while the turn-over for other dealers is fixed at Rs. 30,000. A dealer dealing purely in non-taxable goods is not liable to pay tax and is not liable to obtain a certificate of registration.

Besides registration certificate, the Act provides for the issue of other privileged documents, namely, licence, authorisation, recognition and permit. A dealer holding a licence can purchase goods free of general sales tax for resale subject to certain conditions. An authorisation enables a dealer holding it to purchase goods free of both the sales tax and the general sales tax for sale in the course of inter-State trade and commerce or in the course of export subject to prescribed conditions. A recognition enables a manufacturer to purchase free of both the sales tax and the general sales tax certain goods for sale and for use in the packing of goods so manufactured. A permit enables a registered dealer who bona fide buys for an agreed commission any goods on behalf of a principal mentioned in his books of account, to purchase such goods free of tax under prescribed conditions.

A dealer registered under the Central Sales Tax Act, 1956, but who is not liable to pay tax under section 3 of the Bombay Sales Tax Act, 1959, shall nevertheless be liable to pay tax—

(a) on sale of goods in respect of the purchase of which he has furnished a declaration under sub-section (4) of section 8 of the Central Sales Tax Act, 1956, and

(b) on sale of goods so purchased have been used and accordingly, the provisions of sections 7 to 12 shall apply to such sales, as they apply to the sales made by a dealer liable to pay tax under section 3 of the Bombay Sales Tax Act, 1959.

Every dealer who is liable to pay tax under sub-section (1) shall, for the purposes of sections 32, 33, 34, 35, 36, 37, 38, 46, 47 and 48 be deemed to be a registered dealer. The Act contains 5 schedules, namely:

Schedule "A".—It enumerates 51 classes of goods which are free from all taxes.

Schedule " B ".—This Schedule is in two parts and lists declared goods. Part I lists the declared goods which are subjected to sales tax and Part II lists the goods which are subjected to general sales tax. Part I contains three classes of goods and Part II, six classes of goods.

Schedule " C ".—This Schedule lists 72 classes of goods liable only to sales tax at the first stage of sale.

Schedule " D ".—This Schedule lists ten classes of goods subjected to general sales tax.

Schedule " E".—This Schedule lists 21 classes of goods of which the last is a residuary class of classification. These goods are liable both to sales tax and general sales tax. As mentioned earlier, the ordinary registered dealer is liable to pay retail turn-over tax of per cent on the turn-over of goods in this schedule.

The sale of a large number of goods consisting mostly of articles of consumption of comparatively poorer section of the community is exempted from tax altogether. The rates of tax, on sales of goods liable to tax, vary according to the cost of goods, the economic condition of the section of the population which mainly consumes the goods, and other factors such as imposition of duty under some other State law on goods like cloth, sugar, etc.

Organisation: For the purpose of the administration of the Sales fax Act in Ahmadnagar district two Sales Tax Officers have been appointed with head-quarters at Ahmadnagar. The Sales Tax Officer exercises the powers delegated to him under the Bombay Sales Tax Act, 1959. He registers the dealers liable to pay tax and grants documents such as licence, authorisation, recognition and permit to those who are eligible for the same. The Sales Tax Officer receives periodical returns from the dealers showing the turn-over during the period and the tax payable by them. He verifies the returns and passes order of assessment. He issues notices for demand, if any, after assessment and takes necessary steps to recover the tax assessed. He is primarily responsible for the general administration of the office.

The officer next above the Sales Tax Officer, Ahmadnagar district, is the Assistant Commissioner of Sales Tax (Administration-cum-Appeals), Range II, Central Division, Pune, with head-quarters at Pune. The Sales Tax Officer seeks clarifications and advice from the Assistant Commissioner who hears appeals filed by the assessees aggrieved against the assessment orders passed by the Sales Tax Officer. The officer next above the Assistant Commissioner of Sales Tax (Administration-cum-Appeals), Ahmadnagar, is the Deputy Commissioner of Sales Tax, Central Division, Pune, with head-quarters at Pune. He enjoys administrative as well as appellate authority over the Assistant Commissioner of Sales Tax and Sales Tax Officers. He is also appointed as an Additional Collector of Thane, Kolaba, Nasik, Jalgaon, Dhule, Ratnagiri, Pune, Ahmadnagar, Satara, Sangli, Kolhapur and Sholapur districts. He exercises, within his jurisdiction, all the powers and discharges all the duties and functions of the Collector under the Maharashtra Land Revenue Code, 1966, for the purpose of recovery of all sums recoverable on account of sales tax dues as arrears of land revenue. But he is subordinate to the Commissioner of Sales Tax, Maharashtra State, Bombay, who is the head of the Sales Tax Department. The Commissioner of Sales Tax, Maharashtra State, Bombay, having head-quarters at Bombay is the chief controlling, inspecting, co-ordinating, executive and administrative authority in the sales tax matters and is directly responsible to the Government of Maharashtra. The Maharashtra Sales Tax Tribunal hears appeals/revisions from assessees aggrieved against the orders of the Commissioner of Sales Tax, the Deputy Commissioner of Sales Tax and the Assistant Commissioner of Sales Tax.

Reference application can be filed to the High Court on a question of law arising out of orders of the Maharashtra Sales Tax Tribunal.

The following statement shows the position of the number of registered dealers and total tax collected under the Bombay Sales Tax Act for a few years from 1946-47:—


Number of registered dealers

Total tax collected