Economics of Kautiliya Shukra and Brihaspati.pmd

There were however some other sources of revenue which
are at present called excise and customs; these are called in ancient
books as shulk. In the regulation of these the king had a somewhat
free hand. The later law books attempted even to regulate these by
fixed laws. Yet they could not exhaust the list ad a greedy or needy
sovereign could find some loop hole. The Nandas are accused to have
taxed hides or furs. Evidently these articles had not been taxed before.
There was a vast trade in skins or furs between the Magadha Empire
and the Himalayan countries as the Arthashastra (Kautilya's
Arthashastra, 11.2) proves.
These imports when taxed by the predecessors of
Chandragupta gave rise to accusations of greed. Evidently it was with
reference to such occasions and opportunities and the realization of
the bhaga in general that cannons of taxation were evolved and settled.
The general principles of taxation in ancient books are-
1. In taxation the king should not by greediness destroy his own
foundations as well as those of others. 2 (Mahabharata, Shanti Parva 87.18)
2. Subjects may be taxed in a way that they may remain strong
to heart future burdens and if necessary heavier ones. If the calf is
permitted to suck it grows strong. O bharata, and can bear heavy
weight and pain. The king should milch taxes keeping the above
principle in view. Over milching is to weaken the calf and consequently
harms the milcher himself. (ibid, 87.20-21)
3. It is not the heavily taxed realm which executes great deeds
but the moderately taxed one, whose ruler not sacrificing the power of
defense manages administration economically. The subjects opposed that
king who is extravagant in administration (eating too much). (ibid, 41.22)
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4. The great principle emphasized is that taxation should be
such that it may not be felt by the subject. The ruler should act like a
bee which collects honey without causing pain to the plant. (ibid,87.89)
5. In raising taxes higher it should be done little by little when
the realm’s prosperity is increasing. The process must be mild so that
the realm might not turn restive. 3 (ibid, 88.4)
6. Taxes should be levied in proper form. They should never
be realized by a proper form. They should never be realized by a
painful mode, milch the cow but do not bore the udders4 . (ibid,88.4)
In Taxing Imports
For imports ancient economists have propounded some
fundamental principles. These principles are described as follows-
1. Sales (price realized), purchases (capital employed), distance
traveled cost of importing, and the total cost also the risks incurred by
the merchant should be fully considered. 5 (Manu-smriti, 7.127)
2. Imports harmful to the state and luxuries (fruitless) are to
be discouraged by taxation. 6 (Kautilya's Arthashastra, 1967, 2.21)
3. Beneficial imports should be made free of imports duties.
4. These articles which are rare in the country and those which
would be seen for future production should be allowed in free.
5. Certain commodities should not be exported while their
imports are to be encouraged by not being taxed at all. They were for
instance-
(a). Weapons and armours
(b). Metals
(c). Chariots
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