VAT Advisory visits perform a dual function:
a)   In the first instance it can be confirmed that the VAT dealer is a genuine business and is correctly registered and that information recorded in the VAT dealer file from the registration application form is accurate. This information should provide the basis for the initial control of the VAT dealer.
b)   Secondly, the Advisory Visit has proved to be the most effective method of VAT dealer education to achieve voluntary compliance. Time should be taken to explain VAT accounting requirements related to the VAT dealer’s business activities, and the completion of the VAT return. The penalties that would be incurred for late filing of a return and late payment of VAT should be emphasized.

The advisory Visit Procedures are as follows:
1)   Advisory visits should be carried out on all new VAT registrations after the commencement of VAT.
2)   Advisory visits should be completed within two months of the date of registration.
3)   Advisory visits on initial registration should normally be completed by the circle office.
4)   The CTO should allocate advisory visits to the DCTO, except in the case of VAT dealers with a declared taxable turnover exceeding Rs.100 lakhs. The CTO should carry out advisory visits to these dealers.
5)    The registration section should pass the VAT dealer file to the audit section. The audit section should create an advisory visit record (AVR). The receipt of the file should be recorded in the AVR.
6)   The VAT dealer file should be checked for any queries related to the registration and any conditions imposed (i.e., start-up businesses, compulsory registrations, voluntary registrations, VAT dealers executing works contracts for Government departments, local authorities and other VAT dealers selling Schedule VI goods etc).
7)   Advisory visits should all be completed within 1 day.
8)   All actions required on the checklist should be completed; these are set out in the instructions.
9)   The report of the Advisory Visit (Form VAT 303) and the summary of business activities (Form VAT 300) should be completed on return to the office. The reports should be checked by the CTO, any queries resolved with the visiting officer and Form VAT 303 certified by the CTO. The record of the visit should be made in the AVR.
10)   Data collected on the visit should be recorded on the computer system.
11)   The VAT dealer file should be returned to the registration section.

Prior to the Visit
a) The VAT dealer file should be checked for address and telephone numbers. The VAT dealer should be contacted and an appointment made for an advisory visit. Ensure the appointment is with the registered VAT dealer in the case of a sole proprietor, and with a responsible person in all other cases. The accountant or other professional advisor of the VAT dealer may be present at the interview.
b) Form VAT 304 should be delivered to the VAT dealer confirming the appointment.
c) The information in the VAT dealer file (especially the information furnished on Form VAT 100)should be checked prior to the visit.
Any queries and issues that need to be resolved on the visit should be noted.
On the Visit
a) All particulars on Form VAT 100, and VAT 104 should be checked and confirmed. The signatory of the application Forms should acknowledge the signature.
b) The certificate of incorporation for corporations and partnership agreements for partnerships should be checked. The composition of partnerships should be confirmed.
c) The date of expected or actual first taxable sale and the effective date of registration (EDR) should be established to confirm that the dealer had no obligation to be registered from an earlier date. Where it is established that the dealer was liable to register prior to the date on which they were registered, action should be taken under the provisions in sections 11 and 12 of Chapter 10 of the VAT registration manual.
d) Taxable turnover declarations on Form VAT 100 should be checked with reference to the VAT dealer’s account and records.
e) The declared value of exempt sales should be checked with reference to the VAT dealer’s accounts and records. The exempt sale declaration should be checked to identify whether exempt sales of goods or exempt transactions are being made. Any branch transfer or consignment sales should be recorded.
f) The eligibility for registration should be confirmed in the case of a voluntary registration.
g) The registration record under the C.S.T. Act and any inter-state purchases and sales effected by the VAT dealer prior to advisory visit should be checked.
h) The excess input tax declaration on Form VAT 100 should be checked and the eligibility confirmed.
i) VAT registration certificate – the VAT dealer should be advised that the certificate must be displayed at the place of business, with copies displayed at any other business premises i.e. the branches.
j) VAT Returns – the VAT dealer should be advised that monthly tax returns can be collected from the tax office or obtained from other sources, and that the return must be filed at that office or at designated places like e-seva counters by the 20th of the month following the period to which it is related. Tax must also be paid by tha tdate. EMPHASIZE THE PENALTY FOR FAILURE TO COMPLY.
k) VAT accounting – The system in use by the VAT dealer must be recorded and the VAT accounting requirements and tax invoices must be explained. Leaflets 05A, 5B, 5C and any other leaflet related to the business activities should be given to the VAT dealer.
l) Completion of VAT Return – The completion of the VAT Return should be explained in detail. Acopyofthereturnmarked‘SPECIMEN’withnotesoncompletionrelatedtothe business of the VAT dealer and VAT leaflet 07 should be left with the VAT dealer.
m) The particulars of the main business activity of the VAT dealer such as retailer, manufacturer, importer, works contractor, hotelier, distributor, exporter, etc. should be recorded.
n) Explain in detail the VAT requirements of each business activity. Identify the main goods traded by the VAT dealer. Record sufficient information to establish the activity/commodity code for the VAT dealer.
o) The VAT dealer’s queries should be dealt with, such as:
• Liability of sales • Time tax has to be accounted for • Time tax payment is due • Refund claims - method and timescale, etc • Treatment of industrial incentives.
p) The visiting officer should deal with transitional issues. The procedure for claiming a VAT tax credit for purchases in the 3 months prior to registration, for charging tax and the issue of tax invoices should be explained. The VAT liability of contracts existing prior to VAT registration should also be explained to the dealer.
q) The value of stock and assets at the taxable person’s premises should be estimated. The VAT dealer should be asked for his estimate and this should be confirmed by asking to see the stock, assets and related purchase documents.
r) Any additional information should be recorded regarding associated family businesses (related parties), revenue reliability, previous dealings with the Commercial Taxes Department, registration numbers with other Revenue Departments like Central Excise, Customs, etc.
After the visit
a) Form VAT 300 and VAT 303 should be completed. The activity/commodity code should be confirmed or amended.
b) The VAT rulings given should be recorded.
c) The revenue reliability of a VAT dealer should be considered and an assessment based on:
- The past revenue record of the VAT dealer with the CTD
- The co-operation and overall credibility demonstrated by the VAT dealer on the advisory visit
- An estimated value of assets of the business of the VAT dealer.
d)For example – if the VAT dealer has a poor record of filing tax returns, paying tax due, is uncooperative on the advisory visit and has low value assets, he should be marked ‘POOR’. If he has a good tax payment record, good attitude at the advisory visit and his assets are of reasonable value, he should be marked `GOOD’. Anyone with one or two good points should be marked ‘AVERAGE’.
e) The reports and the VAT dealer folder should be passed to the CTO.
f) The CTO should check off Forms VAT 300 and 303 against the officers weekly visiting record (Form VAT 304A)
g) The CTO should select 20% of the visit reports for an in depth review.
h) The VAT dealer file should be returned to the Registration Section.

The Post Registration Visit visits should be completed within Two months of the Date of Registration.
All Officers are to strictly note that the report of the Post Registration Inspection Visit/ Advisory Visit should be submitted on the online portal within 1 working day from the date of the visit.

The report of the Post Registration Inspection Visit/ Advisory Visit (Form VAT 303) and the summary of business activities (Form VAT 300) are made available online in VATIS. The report should be filled up within 1 day from date of visit .The record of the visit ( Form VAT 303 and VAT 300) will be made available online to the dealer for Viewing & Downloading.