History of The British Salt Tax in India - Taxation of Salt in India - Salt Laws

Salt Laws

The first laws to regulate the salt tax were made by the British East India Company.

In 1835, the Government appointed a salt commission to review the existing salt tax. It recommended that Indian salt should be taxed to enable the sale of imported English salt. Consequently, salt was imported from Liverpool, resulting in the increase of salt rates. Subsequently, the Government set up a monopoly on the manufacture of salt by the Salt Act. Production of salt was made an offense punishable with six months' imprisonment. The committee also recommended that Indian salt be sold in maunds of 100. However, they were sold in much lesser quantities. In 1888, the salt tax was enhanced by Lord Dufferin as a temporary measure. Cheshire salt imported from the United Kingdom was available at a much cheaper rate. However, Cheshire salt was of an inferior quality compared to India's salt. India's salt imports reached 2,582,050 metric tons by 1851.

In 1878, a uniform salt tax policy was adopted for the whole of India, both British India as well as the princely states. Both production as well as possession of salt was made unlawful by this policy. The salt tax, which was one rupee and thirteen annas per maund in Bombay, Madras, Central Provinces, and the princely states of South India, was increased to two rupees and eight annas, and decreased from three rupees and four annas in Bengal and Assam to two rupees and fourteen annas, and from three rupees to two rupees and eight annas in North India.

Section 39 of the Bombay Salt Act, which was the same as Section 16-17 of the Indian Salt Act, empowered a salt-revenue official to break into places where salt was being illegally manufactured and seize the illegal salt being manufactured. Section 50 of the Bombay Salt Act prohibited the shipping of salt overseas.

The India Salt Act of 1882 included regulations enforcing a government monopoly on the collection and manufacture of salt. Salt could be manufactured and handled only at official government salt depots, with a tax of Rs1-4-0 on each maund (82 pounds).