The Political Institutions and Theories of the Hindus: A Study in Comparative Politics c11.t25: b) Taxes on Consumption
The Political Institutions and Theories of the Hindus: A Study in Comparative Politics c11.t25
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b) Taxes on Consumption
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Important taxes of the Mauryas were twofold: customs and excise. Along with land revenue these must have constituted the mainstay of their finance. In Athens⁵ under Pericles the policy of free trade appears to have been adopted as the city depended for its food supply on external sources. Its normal customs duty was therefore as low as 2 per cent. The Roman *portoria*⁵ (customs dues) were higher, the earliest maximum being 5 per cent. The extreme maximum under Constantine was 12 1/2 per cent. But the Maurya tariff was high enough to verge on, if it did not actually establish, an economic "protection". Thus in regard to imported salt the empire demanded in the first place, one-sixth or 16 2/3 per cent of the entire commodity, and in the second place a 5 per cent as trade or sale tax on the remaining 5/6ths.⁶ Similarly foreign liquors, wines and intoxicants had to bear heavy import duties which varied from one-fifteenth or 6⅔ per cent to one-tenth or 10 per cent of their value.¹ In both cases, in addition to the tariff the government charged an extra duty in order to compensate the loss in the sale of local produce. The total maximum may have approached the British customs rate, which though down to 1700 not generally higher than 5 per cent rose to 25 per cent by 1759.²
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⁵ *Enc. Brit.* (Finance). For a detailed account of Athenian finances see Schömann, pp. 432—464.
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⁶ *Ind. Ant.* 1905, p. 53.
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¹ See details, *Ibid*, pp. 50, 55.
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² Dowell's *History of Taxation and Taxes in England*, Vol. I, pp. 82—88, 145, 146, 163—167, 211—223; Vol. II, p. 37.
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The normal Maurya duty on foreign goods was one-fifth of their value, i. e. 20 per cent. One-sixth, i. e. 16⅔ per cent was realized from fresh fruits, vegetables, pepper, dried fish, flesh and other perishable goods. The rates on conches, diamonds, pearls, etc were to be fixed at the custom house by experts. Silk garments, arsenic oxide, skins, carpets, etc were charged *ad valorem* from 6 to 10 per cent. The minimum rates on the tariff schedule were 4 to 5 per cent. In order to be consistent, of course, the Empire severely dealt with all cases of smuggling. The highest fine of 3,000 *paṇas* or 750 was the punishment prescribed for this offence by the penal code.[³] This was nothing extraordinary considering that the penalty for smuggling according to the latest law in the United States is a fine of 5,000 or imprisonment for two years or both. No figures are available as to the gross customs receipts. But it may be surmised that the 27 per cent of the total German Imperial revenues as accruing from customs alone would not have been envied by the Maurya chancellor.⁴
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³ *Ind. Ant.* 1905, pp. 49, 50; Higginson's *Tariffs at Work*, p. 112.
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⁴ Plehn, 184.
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It might seem as if the Empire intended almost to place an embargo on foreign import. But there were certain tendencies in the fiscal policy of the Mauryas in regard to international trade that should indicate a different character of the tariff. The protective duties were high indeed but they were not intended to be "prohibitive". Rather, on the other hand, there was a deliberate attempt on the part of the authorities to encourage foreign imports. They regulated the prices⁵ in such a manner that a reasonable profit was assured to the dealer in imported goods. And if necessary, special instructions were issued to the proper officials to accord concessions in certain particulars to foreign merchants. Under these conditions it is doubtful if the Maurya tariff should be considered as "protective" in any significant sense. In any case its character as a measure for revenue purposes is unquestionable.
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⁵ *Ind. Ant.* 1905, p. 57. Note the seven distinct expenses of marketing, *śulka* (toll), *vartanî* (road-cess), *ativâhika* (conveyance-cess), *gulma-deya* (duty payable at military stations), *târa-deya* (ferry charge), *bhaktâ* (porter's wage), and *bhâga* (share of the state), that were calculated by the customs officials in fixing the price of the imported commodities.
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The duty of 1 per cent on all sales was a regular tax of the Roman Empire. Such an impost, call it market due, toll or octroi, was, as we have noted, prevalent in Athens also. The rates in Maurya India were much higher. Commodities sold by cubical measure were charged 6 ¼ per cent, those by weighing 5 per cent, and those by computation 9 1/11 per cent *ad valorem*.¹ This tax, known by the generic name of excise or inland trade revenue, was assessed by the Mauryas in two ways. In certain lines, e. g. salt, precious metals, etc they retained the monopoly of manufacture and sale for the government. But the general method of assessment was the grant of a license to the vendor or manufacturer.
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¹ *Ibid*, loc. cit.
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The excise branch of the revenues was throughly centralized. The licensing procedure was most efficiently observed. Nobody was permitted to sell the goods at the places of growth or manufacture, e. g. fields, gardens, forests and mines.² All commodities had to be brought to the customs house or toll office near the city gate. These were then marked with the state stamp called *abhijnâna-mudrâ* (mark of identification) in *sindûra* (vermilion). The tax was levied, however, only after sale. The law was strict, as evasion of the excise was a capital offense. False statements to the officials made by merchants in regard to amount or price were moreover punished as cases of theft, i. e. by fine, mutilation or even death.³
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² See details, *Ibid*, pp. 50, 114.
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³ *Ibid*, pp. 48, 49. *Artha* II, xxi.
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It is evident that the customs and excise receipts of the Maurya Empire were much more voluminous than those of the Roman Empire. Analogues for this aspect of Hindu finance have to be sought in modern states like England, France, and Czarist Russia, where half of the national revenues is made up of the returns from customs duties and excises, or the United States where virtually the whole of "federal" revenues is derived from these two elements in the *Aufwand-steuern*.⁴
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⁴ *The Statesman's Year Book*.
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Recent authorities on the *Überwalzung* or "shifting" of taxation are for practical considerations inclined to do away with the formal or verbal distinction that economists have long drawn between the taxes on consumption (like customs and excise) and the taxes on property or income.¹ But using the conventional nomenclature we have to mention that in addition to customs and excise, the so-called "indirect" taxes, the Maurya Empire levied "direct" taxes as well. It has already been pointed out, of course, that a great part of the land revenue was a direct tax on real estate in so far as land was the private property of citizens. The taxes on personalty or movable property have now to be enumerated.
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¹ Giffen's art. on Taxation in the *Enc. Brit.* (*The Different Kinds of Taxes*); Seligman's *Shifting and Incidence of Taxation*, pp. 310, 311.
Linked texts (1)
- Kauṭilīya Arthaśāstra — Kauṭilya, Sanskrit