Kautilya’s Arthasastra, deals with the system of taxation in an elaborate and planned manner, written sometime in 300 B.C. A major portion of Arthasastra is devoted by Kautilya to financial matters including financial administration. According to famous statesman, the State not only collected a part of the agricultural produce which was normally one sixth but also levied water rates, octroi duties, tolls and customs duties. Taxes were also collected on forest produce as well as from mining of metals etc. Salt tax was an important source of revenue and it was collected at the place of its extraction. Kautilya described in detail, the trade and commerce carried on with foreign countries and the active interest of the Mauryan Empire to promote such trade.