Shri Vile Parle Kelavani Mandal’s

Narsee Monjee College of Commerce & Economics

(Autonomous)

Bachelor of Management Studies (BMS) Programme

2021-2022
SYBMS Semester VI Division B
Course Name: INDIRECT TAX
Project Title: COMPARITIVE STUDY OF INDIRECT TAX SYSTEM IN
INDIA AND NORWAY

Submitted by:
Student‟s Name SAP ID Roll No
Ridhima Achaliya 45401190001 B001

Declaration of Originality
I, hereby declare that this assignment titled „Comparative Study of Indirect Tax
System in India and Norway „is entirely my own work and that any additional
sources of information have been duly cited.
I hereby declare that any offline/online sources, published or unpublished, from
which I have quoted or drawn references have been referenced fully in the
bibliography list. I understand that failure to do so will lead to plagiarism and
severe disciplinary action will be initiated against us.
I understand that I may be required to present the assignment and /or appear for
viva (Offline and/ or online). I acknowledge it is my responsibility to keep myself
updated with the schedule of the presentation/ viva and I will ensure I am available
during the same.

Student Name: Ridhima Achaliya Sign:

 COMPARITIVE STUDY OF INDIRECT TAX SYSTEM
IN INDIA AND NORWAY
*Please find the comparison table by the end of the document*

What are indirect taxes?

Indirect taxes are taxes that are not levied directly on an individual's income but are instead
levied indirectly on the individual's expenses. This tax is primarily levied on the seller of goods
or service provider, but in most situations, he passes it on to the end consumer, and therefore the
final consumer pays the burden of this indirect tax.

An indirect tax raises the price of a product or service and is imposed at the same rate on
everyone, regardless of their income, whereas income tax rates vary depending on the
individual's income.

Some examples of these indirect taxes are Service Tax, Excise Duty, Customs Duty, VAT,
Entertainment Tax, Luxury Tax etc.

Indirect Taxes in India

In India, there are seven different forms of indirect taxes. However, after the advent of GST,
these taxes were consolidated into a single tax to make compliance easier.

1. Service tax is a tax assessed on an entity's services and paid by the recipient of such
services. The Central Government is responsible for collecting and depositing service tax,
which is collected and deposited by the central government.
2. Excise duty is a tax imposed on items made or produced in India. It's a manufacturing
tax that's paid by the manufacturer, who then recoups the cost from his customers.
3. Value Added Tax (VAT): In India, this tax is imposed on the sale of moveable
commodities. VAT is levied on goods sold directly to customers by state governments on
intra-state sales, as well as Central Sales Tax, which is collected by the central
government.
4. Customs duty is a charge imposed on products imported into India. It may also apply to
items being moved out of India in specific situations.
 5. Stamp Duty is a state-imposed levy on the transfer of immovable property. The State
Government levies it, and the rates vary. It can also be used on any legal document.
6. Entertainment tax: This tax is levied on all financial transactions related to
entertainment and is only levied by the different state governments. Video games, movie
shows, amusement parks, arcades, sporting activities, and so forth are all examples.
7. Securities Transaction Tax (STT) is a tax levied when securities are traded on the
Indian Stock Exchange.

What is the criteria of paying Indirect Tax in India?

The inception of Goods & Services Tax (GST) has consumed almost all the indirect taxes
prevailing in India before this. Let us take a look at the parties who are eligible to pay GST.

1. Goods & Services Tax (GST)

It stands for Goods and Services Tax. It came into action on 1st July 2017 and has been
used since. In India, there is a slab system under which several rates of GST are there.
Each commodity can be put in a specific slab. GST is levied on the supply of the goods.
If you buy a product, then you have to pay GST based on the slab rate the product falls
in. If you run a business and your turnover exceeds Rs 20 lakhs per year, then also you
are eligible to pay GST. Though GST has replaced all the previous taxes, there are still
 some taxes prevailing. There are some taxes that are still active. Each of these taxes is
required to be paid by different parties.
2. Customs Duty Tax
If you are involved in international trading then you are eligible to pay customs duty.
This is a tax that is charged on the goods that need to be transported outside of your
country.
3. Excise Duty
Though GST has replaced this tax, but there are still some commodities that are charged
with excise duty. These commodities are Liquor, petroleum, fuel, etc. Excise is levied at
the time when the goods are removed from the warehouse.

Indirect taxes in Norway

1. VAT

Norway operates a VAT system similar to that in the EU and VAT is as a general rule levied on
the supply of goods and services, exports and imports, unless an exemption applies. VAT applies
at each stage of production and distribution for most goods and services, including royalties,
advertising and hotel services. The final consumer ultimately bears the VAT as part of the
purchase price.

The standard VAT rate is 25%, with a reduced rate of 15% applying to food stuffs. A
reduced rate of 10% applies to passenger transport, hotel accommodation and cinema
tickets.

Persons engaged in trade or business whose turnover from supplies of taxable goods and services
exceeds NOK 50,000 during a 12-month period are obliged to register for VAT. The
monetary threshold for charitable or philanthropic institutions and organizations is NOK
140,000.

Taxable persons with no place of business or residence in the Norwegian VAT area must register
through a representative who resides or has its place of business in Norway.
Registered taxable persons are required to submit bimonthly electronic VAT returns through the
Norwegian public reporting portal Altinn and pay the VAT due with reference to prescribed
accounting periods. There are six filing and payment dates each year.

Norway offers a refund scheme, which allows foreign entities that are not obliged to register
for VAT in Norway to recover input VAT incurred, subject to formal requirements. The refund
is restricted to entities carrying on a business that would have been subject to Norwegian VAT if
conducted in Norway.

2. Real Estate Tax

Municipal authorities levy “rates” on the occupation of real property. A property tax applies to
the assessed value of real property, at rates ranging between 0.2% and 0.7%, depending on the
location of the property. Some municipalities do not levy the tax.

3. Stamp Duty

A 2.5% stamp duty is levied on deeds of conveyance.

4. Excise and custom duty

Customs duty is levied on agricultural products, some textiles and clothing. Excise duties are
levied on alcohol, tobacco, cars and other vehicles, mineral oil products, electric power,
dangerous chemicals, chocolate, sugar and sugar products, non-alcoholic beverages and
packaging.

5. Environmental Taxes

“Green” taxes are used to steer environmental policy. For instance, vehicles operating on
hydrogen without greenhouse gas emissions are exempt from motor vehicle registration tax and
annual fees. A trading system for greenhouse gas emission rights for companies that do not pay
carbon dioxide tax also applies. To reduce various types of greenhouse gas emission and
encourage recycling, taxes are levied on everything from diesel fuel to sulfur dioxide to
pesticides. However, tax breaks may be granted to encourage environmentally friendly activities.
 Comparison Table
(based on the information above)

Indirect tax in India Indirect tax in Norway

In India there is one common tax GST under
which other indirect taxes are covered under
different slabs.
In India if one‟s turnover exceeds INR 20
lakhs then one is obliged to pay GST.
In India property tax is a direct tax.
In India there is no refund scheme on indirect
taxes for foreign entities.
In India there no environmental tax, rather
citizens are obliged to have pollution under
control ( PUC ) for their vehicles.
In Norway there is no such common tax
system.
While in Norway if your NOK exceeds 50,000
you are obliged to pay VAT.
In Norway real estate tax is an indirect tax
authorized by concerned municipality.
Norway offers a refund scheme, which
allows foreign entities that are not obliged to
register for VAT in Norway to recover input
VAT incurred.
While in Norway “Green” taxes are used to
steer environmental policy.

Suggestions based on the comparison

1. In India like Norway, environmental taxes can target three main areas:
 In the energy sector by taxing fuels which feed into energy generation;

 Differential taxation on vehicles in the transport sector purely oriented towards

fuel efficiency and GPS-based congestion charges;

 Waste generation and use of natural resources.

2. The environmental taxes must be integrated with the Goods and Services Tax framework.
3. In developing countries like India, the revenue can be used to a greater extent for the
provision of environmental public goods and addressing environmental health issues.

References
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-norwayguide-
2017.pdf

https://www.bankbazaar.com/tax/indirect-tax.html

https://www.charteredclub.com/indirect-tax-gst/

https://www.adityabirlacapital.com/abc-of-money/what-are-the-kinds-of-indirect-taxes-in-india