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.

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 the first stage in respect of the same goods and single point levy at the penultimate stage of sale by the licensed dealer to a dealer without a 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 turnover for other dealers is fixed at Rs. 30,000. A dealer dealing purely in non-taxable goods is neither liable to pay tax nor 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 re-sale 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 required by him for use in the manufacture of goods for sale and for use in the packing of goods so manufactured. A permit enables a registered dealer who bonafide 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.

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 in some other State on goods like cloth, sugar, etc.

Organisation: For the purpose of the administration of the Sales Tax Act in Sholapur district, four Sales Tax Officers have been appointed with head-quarters at Sholapur. They register the dealers liable to pay tax and grant 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 and takes necessary steps to recover the tax assessed. The Sales Tax Officer seeks clarifications and advice from Assistant Commissioner who hears appeals filed by the assessees aggrieved against the assessment orders passed by the Sales Tax Officer.

The Assistant Commissioner of Sales Tax (Administration-cum-Appeals), Sholapur, is responsible to 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,

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.

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

Statistics of collections : Table No. 2 shows the number of registered dealers and total tax collected under the Bombay Sales Tax Act in Sholapur district for a few years.