Section 148 of Companies Act, 2013 – Central Government to specify audit of items of cost in respect of certain Companies

SECTION 148. CENTRAL GOVERNMENT TO SPECIFY AUDIT OF ITEMS OF COST

IN RESPECT OF CERTAIN COMPANIES

[Effective from 1st April, 2014]

(1) Notwithstanding anything contained in this Chapter, the Central Government may, by order, in respect of such class of companies engaged in the production of such goods or providing such services as may be prescribed, direct that particulars relating to the utilisation of material or labour or to other items of cost as may be prescribed shall also be included in the books of account kept by that class of companies:

Provided that the Central Government shall, before issuing such order in respect of any class of companies regulated under a special Act, consult the regulatory body constituted or established under such special Act.

(2) If the Central Government is of the opinion, that it is necessary to do so, it may, by order, direct that the audit of cost records of class of companies, which are covered under sub-section (1) and which have a net worth of such amount as may be prescribed or a turnover of such amount as may be prescribed, shall be conducted in the manner specified in the order.

(3) The audit under sub-section (2) shall be conducted by a [cost accountant] [21] who shall be appointed by the Board on such remuneration as may be determined by the members in such manner as may be prescribed:

Provided that no person appointed under section 139 as an auditor of the company shall be appointed for conducting the audit of cost records:

Provided further that the auditor conducting the cost audit shall comply with the cost auditing standards.

Explanation.—For the purposes of this sub-section, the expression “cost auditing standards” mean such standards as are issued by the [Institute of Cost Accountants of India] [22] , constituted under the Cost and Works Accountants Act, 1959 (23 of 1959), with the approval of the Central Government.

(4) An audit conducted under this section shall be in addition to the audit conducted under section 143.

(5) The qualifications, disqualifications, rights, duties and obligations applicable to auditors under this Chapter shall, so far as may be applicable, apply to a cost auditor appointed under this section and it shall be the duty of the company to give all assistance and facilities to the cost auditor appointed under this section for auditing the cost records of the company:

Provided that the report on the audit of cost records shall be submitted by the [cost accountant] [23] to the Board of Directors of the company.

(6) A company shall within thirty days from the date of receipt of a copy of the cost audit report prepared in pursuance of a direction under sub-section (2) furnish the Central Government with such report along with full information and explanation on every reservation or qualification contained therein.

(7) If, after considering the cost audit report referred to under this section and the information and explanation furnished by the company under sub-section (6), the Central Government is of the opinion that any further information or explanation is necessary, it may call for such further information and explanation and the company shall furnish the same within such time as may be specified by that Government.

(8) If any default is made in complying with the provisions of this section,—

(a) the company and every officer of the company who is in default shall be punishable in the manner as provided in sub-section (1) of section 147;

(b) the cost auditor of the company who is in default shall be punishable in the manner as provided in sub-sections (2) to (4) of section 147.

Applicable Rules

Companies (Audit and Auditors) Rules, 2014

[Effective from 1st April, 2014]

Rule 14. Remuneration of the Cost Auditor: For the purpose of sub- section (3) of section 148,—

(a) in the case of companies which are required to constitute an audit committee—

(i) the Board shall appoint an individual, [24] [who is a cost accountant], or a firm of cost accountants in practice, as cost auditor on the recommendations of the Audit committee, which shall also recommend remuneration for such cost auditor;

(ii) the remuneration recommended by the Audit Committee under (i) shall be considered and approved by the Board of Directors and ratified subsequently by the shareholders;

(b) in the case of other companies which are not required to constitute an audit committee, the Board shall appoint an individual [25] [who is a cost accountant] or a firm of cost accountants in practice as cost auditor and the remuneration of such cost auditor shall be ratified by shareholders subsequently.

Companies (Cost Records and Audit) Rules, 2014

[Effective from 30th June, 2014]

G.S.R. 425(E) – In exercise of the powers conferred by sub-sections (1) and (2) of section 469 and section 148 of the Companies Act, 2013 (18 of 2013) and in supersession of Companies (Cost Accounting Records) Rules, 2011; Companies (Cost Audit Report) Rules, 2011;Cost Accounting Records (Telecommunication Industry) Rules, 2011; Cost Accounting Records (Petroleum Industry) Rules, 2011; Cost Accounting Records (Electricity Industry) Rules, 2011; Cost Accounting Records (Sugar Industry) Rules, 2011; Cost Accounting Records (Fertilizer Industry) Rules, 2011 and Cost Accounting Records (Pharmaceutical Industry) Rules, 2011, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:—

Rule 1. Short title and commencement.— (1) These rules may be called the Companies (Cost Records and Audit) Rules, 2014.

(2) They shall come into force on the date of publication in the Official Gazette.

Rule 2. Definitions.— In these rules, unless the context otherwise requires —

(a) “Act” means the Companies Act, 2013 (18 of 2013);

[(aa) “Customs Tariff Act Heading” means the heading as referred to in the Additional Notes in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).][1]

(b) “Cost Accountant in practice” means a cost accountant as defined in clause (b) of subsecti on (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959), who holds a valid certificate of practice under sub-section (1) of section 6

of that Act and who is deemed to be in practice under sub-section (2) of section 2 thereof, and includes a firm or limited Liability partnership of cost accountants;

(c) “cost auditor” means a Cost Accountant in practice, as defined in clause (b), who is appointed by the Board;

[(d) “cost audit report” means the duly signed cost auditor’s report on the cost records examined and cost statements which are prepared as per these rules, including attachment, annexure, qualifications or observations attached with or included in such report][9];

(e) “cost records” means books of account relating to utilisation of materials, labour and other items of cost as applicable to the production of goods or provision of services as provided in section 148 of the Act and these rules;

(f) “form” means a form annexed to these rules;

[18][(fa) “lndian Accounting Standards” means Indian Accounting Standards as referred to in Companies (lndian counting Standards) Rules, 2015. ]

9 . In the principal rules, in the Annexure, for Form CM-1 and Form CRA

(g) “institute” means the Institute of Cost Accountants of India constituted under the Cost and Works Accountants Act, 1959 (23 of 1959);

(h) all other words and expressions used in these rules but not defined, and defined in the Act or in the Companies (Specification of Definition Details) Rules, 2014 shall have the same meanings as assigned to them in the Act or in the said rules.

Rule 3. Application of cost records.– [For the purposes of sub-section (I) of section 148 of the Act. the class of companies, including foreign companies defined in clause (42) of section 2 of the Act, engaged in the production of the goods or providing services, specified in the Table below, having an overall turnover from all its products and services of rupees thirty five crore or more during the immediately preceding financial year, shall include cost records for such products or services in their books of account., namely:-

[(A) Regulated Sectors

S. No.	Industry/Sector/Product/Service	[19][Customs Tariff Act Heading] (Wherever Applicable)
1	Telecommunication services made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature and regulated by the Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 7997 (24 of 1997); including activities that requires authorisation or license issued by the Department of Telecommunications, Government of India under Indian Telegraph Act, 1885 (13 of 1885);	Not applicable
2	Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 (36 of 2003);	2709 to 2715; Other Activity Not Applicable
3	Petroleum products; including activities regulated by the Petroleum and Natural Gas Regulatory Board under the Petroleum and Natural Gas Regulatory Board Act,2006 (19 of 2006);	2709 to 2715;
4	Drugs and pharmaceuticals;	2901 to 2942; 3001 to 3006
5	Fertilisers;	3102 to 3105
6	Sugar and industrial alcohol;	1701; 1703; 2207

 

(B) Non- Regulated Sectors

S. No.	Industry/Sector/Product/Service	[20] [Customs Tariff Act Heading] (Wherever Applicable)
1	Machinery and mechanical appliances used in defence, space and atomic energy sectors excluding any ancillary item or items; Explanation. – Forthe purposes ofthis sub-clause, any company which is engaged in any item or items supplied exclusively for use under this clause, shall be deemed to be covered under these rules	8401; 8801 to 8805;8901 to 8908
2	Turbo jets and turbo propellers;	8411
3	Arms, ammunitions and Explosives;	3601 to 3603; 9301 to 9306.
4	Propellant powders; prepared explosives (Other than propellant powders); safety fuses; detonating fuses; percussion or detonating caps; igniters; electric detonators	3601 to 3603
5	Radar apparatus, radio navigational aid apparatus and radio remote control apparatus;	8526
6	Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons and parts of such vehicles, that are funded (investment made in the company) to the extent of ninety per cent or more by the government or government agencies	8710
7	Port services of stevedoring, pilotage, hauling, mooring, re-mooring, hooking, measuring, loading and unloading [services rendered for a Port in relation to a vessel or goods regulated by the Tariff Authority for Major Ports under the Major Port Trusts Act, 1963 (38 of 1963)][26];	Not Applicable
8	Aeronautical services of air traffic management, aircraft operations, ground safety services, ground handling, cargo facilities and supplying fuel rendered [at the airports][27] and regulated by the Airports Economic Regulatory Authority under the Airports Economic Regulatory Authority of India Act., 2008 (27 of 2008);	Not Applicable
9	Iron and Steel;	7201 to 7229; 7301 to 7326
10	Roads and other infrastructure projects corresponding to para No. (1) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013);	Not Applicable
11	Rubber and allied products; including products regulated by the Rubber Board constituted under the Rubber Act, 1.947 (XXIV of 1947);	4001 to 4017
12	Coffee and Tea;	0901 to 0902
13	Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipment’s of all kinds;	8601 to 8608, [8609][28]
14	Cement;	2523; 6811 to 6812
15	Ores and Mineral Products;	2502 to 2522; 2524 to 2526; 2528 to 2530;2601 to 2617
16	Mineral fuels (other than petroleum), mineral oils etc.	2701 to 2708
17	Base Metals;	7401 to 7403; 7405 to 7413;7419; 7501 to 7508; 7601 to 7614; 7801 to 7802; 7804; 7806; 7901 to 7905; 7907; 8001; 8003; 8007; 8101 to 8113.
18	Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals of radioactive elements or isotopes, and organic chemicals;	2801 to 2853; 2901 to 2942; 3801 to 3807; 3402 to 3403; 3809 to 3824.
19	Jute and Jute products;	5303, , [5307][29],5310,
20	Edible Oil;	1507 to 1518
21	Construction Industry as per para No. (5) (a) as specified in Schedule VI of the Companies Act, 2013	Not Applicable
22	Health Services, namely functioning as or running hospitals, diagnostic centres, clinical centres or test laboratories;	Not Applicable
23	Education services, other than such similar services falling under philanthropy or as a part of social spend which do not form part of any business;	Not Applicable
24	Milk Powder;	0402
25	Insecticides;	3808
26	Plastics and polymers;	3901 to 3914; 3916 to 3921; 3925
27	Tyres and tubes;	4011 to 4013
28	[Pulp and Paper][30];	[4701 to 4704][31], 4801 to 4802
29	Textiles;	5004 to 5007; 5106 to 5113; 5205 to 5212; 5303; [5307][32] ; 5310; 5401 to 5408; 5501 to 5516.
30	Glass;	7003 to 7008; 7011; 7016
31	Other machinery and Mechanical Appliances;	8402 to 8487
32	Electricals or electronic machinery;	8501 to 8507; 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547.
33	Production, import and supply or trading of following medical devices, namely: (i) Cardiac stents; (ii) Drug eluting stents; (iii) Catheters; (iv) Intra ocular lenses; (v) Bone Cements; (vi) Heart valves; (vii) Orthopaedic implants; (viii) Internal prosthetic replacements; (ix) Scalp vein set; (x) Deep brain stimulator; (xi) Ventricular peripheral shud; (xii) Spinal implants; (xiii) Automatic impalpable cardiac [defibrillators][33]; (xiv) Pacemaker (temporary and permanent) (xv) Patent ductus arteriosus, atrial septal defect and ventricular septal defect closure device; (xvi) Cardiac re-synchronize therapy; (xvii) Urethra spinicture devices; (xviii) Sling male or female; (xix) Prostate occlusion device; and (xx) Urethral stents;	9018 to 9022

][10]

Provided that nothing contained in serial number 33 shall apply to foreign companies having only liaison offices.

Provided further that nothing contained in this rule shall apply to a company which is classified as a micro enterprise or a small enterprise including as per the turnover criteria under sub-section (9) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006).

Rule 4. Applicability for cost audit.-[(1) Every company specified in item (A) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees fifty crore or more and the aggregate turnover of the individual product or products or services for which cost records are required to be maintained under rule 3 is rupees twenty five crore or more.

(2) Every company specified in item (B) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees one hundred crore or more and the aggregate turnover of the individual product or products or service or services for which cost records are required to be maintained under rule 3 is rupees thirty five crore or more.

(3) The requirement for cost audit under these rules shall not apply to a company which is covered in rule 3, and-

(i) whose revenue from exports, in foreign exchange, exceed seventy five percent of its total revenue; or

(ii) which is operating from a special economic zone.][2]

[(iii) which is engaged in generation of electricity for captive consumption through Captive Generating Plant. For this purpose, the term “Captive Generating Plant” shall have the same meaning as assigned in rule 3 of the Electricity Rules, 2005][11]

Rule 5. Maintenance of records.– (1) Every company under these rules including all units and branches thereof, shall, in respect of each of its financial year commencing on or after the 1st day of April, 2014, maintain cost records in [form CRA-1][3].

[Provided that in case of company covered in serial number 12 and serial numbers 24 to 32 of item (B) of rule 3, the requirement under this rule shall apply in respect of each of its financial year commencing on or after 14 day of April, 2015,][4]

(2) The cost records referred to in sub-rule (1) shall be maintained on regular basis in such manner as to facilitate calculation of per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities for every financial year on monthly or quarterly or half-yearly or annual basis.

(3) The cost records shall be maintained in such manner so as to enable the company to exercise, as far as possible, control over the various operations and costs to achieve optimum economies in utilisation of resources and these records shall also provide necessary data which is required to be furnished under these rules.

Rule 6. Cost audit.– (1) The category of companies specified in rule 3 and the thresholds limits laid down in rule 4, shall within one hundred and eighty days of the commencement of every financial year, appoint a cost auditor.

[“Provided that before such appointment is made, the written consent of the cost auditor to such appointment, and a certificate from him or it, as provided in sub-rule (1A), shall be obtained”;][12]

[“(1A) The cost auditor appointed under sub-rule (1) shall submit a certificate that- (a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Cost and Works Accountants Act, 1959 (23 of 1959) and the rules or regulations made thereunder;

(b) the individual or the firm, as the case may be, satisfies the criteria provided in section 141 of the Act, so far as may be applicable;

(c) the proposed appointment is within the limits laid down by or under the authority of the Act; and

(d) the list of proceedings against the cost auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.”;][13]

(2) Every company referred to in sub-rule (1) shall inform the cost auditor concerned of his or its appointment as such and file a notice of such appointment with the Central Government within a period of thirty days of the Board meeting in which such appointment is made or within a period of one hundred and eighty days of the commencement of the financial year, whichever is earlier, through electronic mode, in [form CRA-2][5], alongwith the fee as specified in Companies (Registration Offices and Fees) Rules, 2014.

(3) Every cost auditor appointed as such shall continue in such capacity till the expiry of one hundred and eighty days from the closure of the financial year or till he submits the cost audit report, for the financial year for which he has been appointed.

[“Provided that the cost auditor appointed under these rules may be removed from his office before the expiry of his term, through a board resolution after giving a reasonable opportunity of being heard to the Cost Auditor and recording the reasons for such removal in writing;

Provided further that the Form CRA-2 to be filed with the Central Government for intimating appointment of another cost auditor shall enclose the relevant Board Resolution to the effect;

Provided also that nothing contained in this sub-rule shall prejudice the right of the cost auditor to resign from such office of the company.”;][14]

[(3A) Any casual vacancy in the office of a cost auditor, whether due to resignation, death or removal, shall be filled by the Board of Directors within thirty days of occurrence of such vacancy and the company shall inform the Central Government in Form CRA-2 within thirty days of such appointment of cost auditor,][6]

[(3B) The cost statements, including other statements to be annexed to the cost audit report, shall be approved by the Board of Directors before they are signed on behalf of the Board by any of the director authorised by the Board, for submission to the cost auditor to report thereon”;][15]

(4) Every cost auditor, who conducts an audit of the cost records of a company, shall submit the cost audit report along with his or its reservations or qualifications or observations or suggestions, if any, in [form CRA-3][7].

[(5) Every cost auditor shall forward his duly signed report to the Board of Directors of the company within a period of one hundred and eighty days from the closure of the financial year to which the report relates and the Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.”;][16]

[“(6) Every company covered under these rules shall, within a period of thirty days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report alongwith full information and explanation on every reservation or qualification contained therein, in Form CRA-4 in Extensible Business Reporting Language format in the manner as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting language) Rules, 2015 alongwith fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”][17]

[Provided that the Companies which have got extension of time of holding Annual General Meeting under section 96 (1) of the Companies Act, 2013 may file form CRA-4 within resultant extended period of filing financial statements under section 137 of the Companies Act, 2013.][34]

(7) The provisions of sub-section (12) of section 143 of the Act and the relevant rules made thereunder shall apply mutatis mutandis to a cost auditor during performance of his functions under section 148 of the Act and these rules.

[Rule 7. **][8]

 

Applicable Circulars

Clarification on matters relating to the Companies (Cost Records and Audit) Rules, 2014.

General Circular No. 42/2014 dated 12-11-2014

Government has received representations from stakeholders seeking clarifications about Rules 5 (1) and 6 (2) of the Companies (Cost Records and Audit) Rules, 2014 regarding maintenance of cost records and filing of notice of appointment of the Cost Auditor in Form CRA-2 in electronic mode. The matter has been examined in the Ministry and the following is clarified:

Considering delay in availability of Form CRA-2 on the MCA website,it has been decided to extend the date of filing of the said Form without any penalty/late fee up to 31st January, 2015. Form CRA-2 will be made available on the MCA website soon. It is noted that some companies have filed Form 23C for appointment of Cost Auditor for the financial year 2014-15. It is clarified that such companies need not file form CRA-2 afresh for the financial year 2014-15.

 

Extension of time for filing of Notice of appointment of the Cost Auditor in Form CRA-2.

General Circular No. 02/2015 dated 11-2-2015

In continuation to the General Circular No. 42/2014, the last date of filing of Form CRA- 2 without any penalty/late fee is hereby extended upto 31st March, 2015.

 

Extension of time for filing of Notice of appointment of the Cost Auditor for the F.Y, 2015-16 in Form CRA-2 and filing of cost audit report to the Central Government for the F.Y, 2014-15 in form CRA-4

General Circular No. 08/2015 dated 12-6-2015

The Ministry has received several representations about the non-availability of the revised form CRA-2 on MCA-21 required for filing of notice of appointment of the Cost Auditor for the F.Y. 2015-16, although the time limit for filing of the same has either lapsed or will be lapsing. The revised form CRA-2 has now been notified on 12th June, 2015 and is available on the MCA-21 system for filing.

2. In view of the delay in availability of revised Form CRA-2 on the MCA portal, however, thc additional fee on account of any delay beyond the prescribed period of 30 days from the date of board Meeting in which the appointment of the Auditor was made for filing of CRA-2 for the financial year starting on or after 1st April, 2015 is waived for all such filings till 30th June, 2015.
3. The revised e-Form CRA-4 has also been notified vide the above mentioned notification and will be made available on MCA-21 portal shortly. Therefore, on the similar lines mentioned in above paras, additional fees on delayed filing of form CRA- 4 beyond the prescribed period of 30 days from the date of receipt of a copy of Cost Audit Report from the Cost Auditor for the Financial Year starting on or after 1st April, 2014 is also waived for all such filings till 31st August, 2015.

Extension of time for filing of cost audit report to the Central Government for the Financial Year 2014-2015 in form CRA-4

General Circular No.12/2015 dated 1-9-2015

In Continuation to General Circular No.08/2015 dated 12.06.2015, the last date of filing of Form CRA-4 without any penalty/late fee is hereby extended upto 30th September, 2015.

 

Relaxation of additional fees and extension of last date of filing of Form CRA.4 under the Companies Act, 2013

General Circular No 15/2017 dated 4-12-2017

The Ministry of Corporate Affairs has received several representations about extension of the last date for filing of Form CRA-4 without additional fees on account of Companies (Cost Records and Audit) Amendment Rules, 2017 and other reasons. The matter has been examined and it has been decided to extend the last date for filing of Form CRA-4, for the financial years starting on or after 1st April, 2016, without additional fees till 31st December, 2017.

Relaxation of additional fees and extension of last date of  in filling of CRA-4 (Cost Audit Report in XBRL format) – regarding.

General Circular No.11/2018 dated 10-12-2018

Keeping in view the requests received from various stakeholders seeking extension of time for filing Cost Audit Report for the financial year ended 31.03.2018 on account of various factors , it has been decided to relax the additional fees payable by companies on CRA-4 (Cost Audit Report in XBRL format) upto 31.12.2018, wherever additional fee is applicable.

 

Relaxation of additional fees and extension of last date of filing e-form CRA-2 (Form of intimation of appointment of cost auditor by the company to Central Government) in certain cases under the Companies Act’ 2013 reg.

General Circular No. 04/2019 dated 4^th April, 2019

1. The Ministry has received several representations about extension of last date for filing e-form CRA-2 without additional fees where the company has been mandated to get its cost records audited for the first time under Companies Act, 2013 on account of Companies (Cost Records and Audit) Amendment Rules, 2018 as notified vide G.S.R. 1157(E) dated 03.12.2O18.
2. The matter has been examined and it has been decided to extend the last date for filing of e-form CRA-2 in the abovementioned cases without payment of additional fees upto 31.05.2019.

Relaxation of additional fees and extension of last date of filing of CRA-4 (cost audit report) for FY 2018-19 under the Companies Act, 2013 – reg.

General Circular No. 12/2019 Dated 24th October, 2019

With reference to subject cited above, an advisory was hosted on the website of the Ministry that:-

‘Costing Taxonomy 2019 to cater to the annual filing of CRA-4 (cost audit report) for FY 2018-19 is under development. The companies which are required to file CRA-4 (cost audit report) for FY 2018-19 are required to use Costing Taxonomy 2019 only. Those who have already filed CRA-4 (cost audit report) using the existing Costing Taxonomy 2015 for FY 2018-19 are NOT required to file afresh. However, those companies which are yet to file their Cost Audit Reports are requested to await deployment of Costing Taxonomy 2019 on MCA21 portal. Once the Costing Taxonomy 2019 is deployed, sufficient time would be given for filing CRA-4 without levying additional fee. Stakeholders may kindly take note and plan accordingly.”

2. In this regard, it is hereby informed that the Companies (cost records and audit) Amendment Rules, 2019 and Companies (Filing of Documents and Forms in Extensible Business Reporting Language), Amendment Rules, 2019 have been notified on 15.10.2019 and simultaneously the work of deployment of costing taxonomy 2019 is under process.

3. In view of above and the difficulties expressed by various stakeholders for extending the last date of filing of CRA-4 (cost audit report), it has been decided to extend the last date for filing of CRA-4 (cost audit report) for all eligible companies for the FY 2018-19, without payment of additional fee till 31st December, 2019.

4. It may be noted that the said extension is being given for the entire process starting from ‘preparation of Annexures to the Cost Audit Report’ to ‘submission of Cost Audit Report by the Cost Auditor to the Company’ and finally ‘filing of Cost Audit Report by the Company with the Central Government’.

Relaxation of additional fees and extension of last date of filing of CRA-4 (cost audit report) for FY 2018-19 under the Companies Act, 2013 – reg.

General Circular No. 17/2019 dated 30.12.2019

In continuation to this Ministry’s General Circular No. 1 2 / 20 19 dated 24 .10.2019 on the above subject and in view of several representations received from various stakeholders for extension of last date, it is informed that the last date of filing of CRA-4 (cost audit report) for all eligible companies for the Financial Year 2018-19, without payment of additional fee, has been further extended till 29.02.2020.

It may be noted that the said extension is given for the entire process starting from ‘preparation of Annexures to the Cost Audit Report’to ‘submission of Cost Audit Report by the Cost Auditor to the Company’ and finally ‘filing of Cost Audit Report by the Company with the Central Government’

Relaxation of additional fees and extension of last date of filing of CRA-4 (form for filing
of cost audit report) for FY 2019-20 under the Companies Act, 2013 – reg.

General Circular No.29/2020 dated 10th September, 2020

Representations have been received from various stakeholders for extension of last date of filing of CRA-4 (form for filing of cost audit report) due to impact of COVID-19 pandemic.

In view of the extraordinary disruption caused due to the pandemic, it has been decided that if cost audit report for the financial year 2019-20 by the cost auditor to the Board of Directors of the companies is submitted by 30^th November, 2020 then the same would not be viewed as violation of rule 6(5) of Companies (cost records and audit) Rules, 2014. Consequently, the cost audit report for the financial year ended on 31^st March, 2020 shall be filed in e-form CRA-4 within 30 days from the date of receipt of the copy of the cost audit report by the company. However, in case a company has availed extension of time for holding Annual General Meeting then e-form CRA-4 may be filed within the timeline provided under the proviso to rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014.

Relaxation of additional fees and extension of last date of filing of CRA-4 (form for filing of cost audit report) for FY 2019-20 under the Companies Act, 2013 -reg.

General Circular No. 38/2020 dated 1st December, 2020

In continuation to this Ministry’s General Circular No. 29/2020 dated 10^th September, 2020, in view of large scale disruption caused by the COVID-19 pandemic and after due examination of the representations received from various stakeholders, it has been decided to substitute the word and figures “30^th November,2020” with the word and figures “31^st December, 2020” in the said General Circular.

2. The other requirements as mentioned in the said General Circular shall remain unchanged.

 

Extension of last date of filing of Cost Audit Report to the Board of Directors under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014-reg.

General Circular No. 15/2021 dated 27th September, 2021

Representations have been received from various stakeholders for extension of last date of filing of Cost Audit Report to the Board of Directors under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014 due to impact of COVID-19 pandemic.

2. In view of the extraordinary disruption caused due to the pandemic, it has been decided that if cost audit report for the financial year 2020-21 by the cost auditor to the Board of Directors of the companies is submitted by 31st October,2021 then the same would not be viewed as violation of rule 6(5) of Companies (cost records and audit) Rules, 2014. Consequently, the cost audit report for the financial year ended on 31st March, 2021 shall be filed in e-form CRA-4 within 30 days from the date of receipt of the copy of the cost audit report by the company. However, in case a company has got extension of time for holding Annual General Meeting under section 96(1) of the Act then e-form CRA-4 may be filed within the timeline provided under the proviso to rule 6(6) of the companies (Cost Records and Audit) Rules, 2014.

 

Extension of last date of filing of Cost Audit Report to the Board of Directors under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014-reg

General Circular No. 18/2021 dated 29^th October, 2021

In continuation to this Ministry’s General Circular No.15/2021 dated 27.09.2021, in view of the disruption caused by the COVID-19 pandemic and after due examination of the representations received from stakeholders, it has been decided to substitute the word and figures “31^stOctober, 2021″ with the word and figures “30^thNovember, 2021″ in the said General Circular.

2.The other requirements as mentioned in the said General Circular shall remain unchanged.

[1] Substituted by the Companies (cost records and audit) Second Amendment Rules, 2017 vide Notification F. No. 1/40/2013-CL-V dated 20^th December, 2017 effective from 1^st July, 2017. Prior to the substitution it read as under:

“(aa) “Central Excise Tariff Act Heading” means the heading as referred to in the Additional Notes in the First Schedule to the Central Excise Tariff Act, 1985 [5 of 1986]”

[2] Substituted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014. Prior to the substitution it read as under:

“Rule 4. Applicability for cost audit.–

(1) Every company engaged in a strategic industry and covered under sub-clause (b) of clause (A) of rule 3 shall be required to get its cost records audited in accordance with these rules.

(2) In the case of a multi-product or a multi services company specified in sub-clause (b) of clause (B) and sub-clause (b) of clause (C) of rule 3, the requirement for cost audit shall apply to a product or a service for which the individual turnover (from such specific product or such specific service) is rupees one hundred crore or more;

(3) In the case of a company producing any one specific product or service specified in sub-clause (b) of clause (B) and sub-clause (b) of clause (C) of rule 3, the requirement for cost audit shall apply if the net worth of the company is rupees five hundred crore or more or the turnover from such product or such service is rupees one hundred crore or more.

(4) In the case of a company engaged in medical products or devices referred to in sub-clause (b) of clause (D) of rule 3, –

(i) which has multiple products or devices (i.e. a company producing, importing and supplying or trading in more than one medical device or product), the requirement for cost audit shall apply to a medical device or product for which the individual turnover (from such specific medical device or product) is rupees ten crore or more, or one third of the turnover, whichever is less;

(ii) which has only one product or device (i.e. a company producing, importing and supplying or trading one medical device or product), the requirement for cost audit shall apply if the net worth of the company is rupees one hundred fifty crores or more or the turnover is rupees twenty five crores or more.”

[3] Inserted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014.

[4] Inserted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014.

[5] Form CRA-2 substituted by the Companies (Cost records and Audit) (Amendment) Rules, 2015 vide Notification F. No. 1/40/2013-CL-V.

[6] Inserted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014.

[7] Form CRA-3 substituted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014

[8] Ommitted by the Companies (Cost Records and Audit) Amendment Rules, 2014 vide Notification No. F No. 1/40/2013-CL-V dated 31st December, 2014. Prior to the omission it read as under:

Rule 7. Rules not to apply in certain cases.- The requirement for cost audit under these rules shall not be applicable to a company which is covered under rule 3, and,

(i) whose revenue from exports, in foreign exchange, exceeds seventy five per cent of its total revenue or

(ii) which is operating from a special economic zone.]

[9] Substituted by the Companies (Cost Records and Audit) Amendment Rules, 2016 vide Notification No. F No. 1/40/2013-CL-V dated 14th July, 2016. Prior to the substitution it read as under:

“cost audit report” means the report duly audited and signed by the cost auditor including attachment, annexure, qualifications or observations etc. to cost audit report.”

[10] Substituted by the Companies (Cost Records and Audit) Amendment Rules, 2016 vide Notification No. F No. 1/40/2013-CL-V dated 14th July, 2016. Prior to the substitution it read as under:

(A) Regulated Sectors

 

S. No.	Industry/Sector/Product/Service	CETA Heading (Wherever Applicable)
1	Telecommunication Services made available to users by means of any transmission or receipt of signs, signals, writing, images and sounds or intelligence of any nature (Other than broadcasting services) and regulated by the telecom and Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997);	Not applicable
2	Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 other than for captive generation (referred to in the Electricity Rules, 2005);	————-
3	Petroleum products regulated by the Petroleum and Natural Gas Regulatory Board under the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006);	2709 to 2715;
4	Drugs and pharmaceuticals;	2901 to 2942; 3001 to 3006
5	Fertilisers;	3102 to 3105
6	Sugar and industrial alcohol;	1701; 1703; 2207

 

(B) Non- Regulated Sectors

S. No.	Industry/Sector/Product/Service	CETA Heading (Wherever Applicable)
1	Machinery and mechanical appliances used in defence, space and atomic energy sectors excluding an coy ancillary item or items; Explanation: For the purposes of this sub-clause, any company which is engaged in any item or items supplied exclusively for use under this clause, shall be deemed to be covered under these rules.	8401 to 8402; 8801 to 8805; 8901 to 8908.
2	Turbo jets and turbo propellers;	8411
3	Arms and ammunitions;	3601 to 3603; 9301 to 9306.
4	Propellant powders; prepared explosives (Other than propellant powders); safety fuses; detonating fuses; percussion or detonating caps; igniters; electric detonators	3601 to 3603
5	Radar apparatus, radio navigational aid apparatus and radio remote control apparatus;	8526
6	Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons and parts of such vehicles, that are funded (investment made in the company) to the extent of ninety per cent or more by the government or government agencies	8710
7	Port services of stevedoring, pilotage, hauling, mooring, re-mooring, hooking, measuring, loading and unloading services rendered by a Port in relation to a vessel or goods regulated by the Tariff Authority for Major Ports under section 111 of the Major Port Trusts Act, 1963 (38 of 1963);	Not Applicable
8	Aeronautical services of air traffic management, aircraft operations, ground safety services, ground handling, cargo facilities and supplying fuel rendered by airports and regulated by the Airports Economic Regulatory Authority under the Airports Economic Regulatory Authority of India Act, 2008 (27 of 2008);	Not Applicable
9	Steel;	7201 to 7229; 7301 to 7326
10	Roads and infrastructure projects corresponding to para No.(1) (a) as specified in Schedule VI of the Companies Act, 2013;	Not Applicable
11	Rubber and allied products being regulated by the Rubber Board constituted under the Rubber Act, 1947 (XXIV of 1947);	4001 to 4017
12	Coffee and Tea;	0901 to 0902
13	Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipments of all kind;	8601 to 8608
14	Cement;	2523; 6811 to 6812
15	Ores and Mineral Products;	2502 to 2522; 2524 to 2526; 2528 to 2530;2601 to 2617
16	Mineral fuels (other than petroleum), mineral oils etc;	2701 to 2708
17	Base Metals;	7401 to 7403; 7405 to 7413; 7419; 7501 to 7508; 7601 to 7614; 7801 to 7802; 7804; 7806; 7901 to 7905; 7907; 8001; 8003; 8007; 8101 to 8113
18	Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals of radioactive elements or isotopes, and organic chemicals;	2801 to 2853; 2901 to 2942; 3801 to 3807; 3402 to 3403; 3809 to 3824
19	Jute and Jute products;	5303, 5310
20	Edible Oil;	1507 to 1518
21	Construction Industry as per para No. (5) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013);	Not Applicable
22	Health Services, namely functioning as or running hospitals, diagnostic centres, clinical centres or test laboratories;	Not Applicable
23	Education services, other than such similar services falling under philanthropy or as a part of social spend which do not form part of any business;	Not Applicable
24	Milk Powder;	0402
25	Insecticides;	3808
26	Plastics and polymers;	3901 to 3914; 3916 to 3921; 3925
27	Tyres and tubes;	4011 to 4013
28	Paper;	4801 to 4802
29	Textiles;	5004 to 5007; 5106 to 5113; 5205 to 5212; 5303; 5310; 5401 to 5408; 5501 to 5516.
30	Glass;	7003 to 7008; 7011; 7016
31	Other Machinery;	8403 to 8487
32	Electricals or electronic machinery;	8501 to 8507; 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547.
33	Production, import and supply or trading of following medical devices, namely: (i)   Cardiac stents; (ii)     Drug eluting stents; (iii)    Catheters; (iv)    Intra ocular lenses; (v)     Bone Cements; (vi)    Heart valves; (vii)    Orthopaedic implants; (viii)   Internal prosthetic replacements; (ix)     Scalp vein set; (x)      Deep brain stimulator; (xi)     Ventricular peripheral shud; (xii)    Spinal implants; (xiii)   Automatic impalpable cardiac deflobillator; (xiv)   Pacemaker (temporary and permanent) (xv)    Patent ductus arteriosus, atrial septal defect and ventricular septal defect closure device; (xvi)   Cardiac re-synchronize therapy; (xvii)  Urethra spinicture devices; (xviii) Sling male or female; (xix)   Prostate occlusion device; and (xx)    Urethral stents;	9018 to 9022

[11] Inserted by the Companies (Cost Records and Audit) Amendment Rules, 2016 vide Notification No. F No. 1/40/2013-CL-V dated 14th July, 2016.

[12] Inserted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016.

[13] Inserted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016

[14] Inserted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016

[15] Inserted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016.

[16] Substituted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016. Prior to the substitution it read as under:

“Every cost auditor shall forward his report to the Board of Directors of the company within a period of one hundred and eighty days from the closure of the financial year to which the report relates and the Board of directors shall consider and examine such report particularly any reservation or qualification contained therein.”

[17] Substituted by the Companies (Cost records & audit) Amendment Rule, 2016 vide Notification No. F. No. 1/40/2013-CL-V dated 14th July, 2016. Prior to the substitution it read as under:

“Every company covered under these rules shall, within a period of thirty days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report alongwith full information and explanation on every reservation or qualification contained therein, in form CRA-4 alongwith fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”

[18] Inserted by the Companies (cost records and audit) Amendment Rules, 2017 vide Notification no. G.S.R 1498(E) dated 7th December, 2017 effective from 1^st April, 2016

[19] Substituted for the words” Central Excise Tariff Act Heading” by the Companies (cost records and audit) Second Amendment Rules, 2017 vide Notifiication No. 1/40/2013-CL-V dated 20^th December, 2017  effective from 1^st July, 2017.

[20] Substituted for the words” Central Excise Tariff Act Heading” by the Companies (cost records and audit) Second Amendment Rules, 2017 vide Notification No. 1/40/2013-CL-V dated 20^th December, 2017 effective from 1^st July, 2017.

[21] Substituted for the words “Cost Accountant in practice” by the Companies (Amendment) Act 2017 vide Notification No. File No. 1/1/2018-CL.I dated 9^th February, 2018.

[22] Substituted for the words “Institute of Cost and Works Accountants of India” by the Companies (Amendment) Act 2017 vide Notification No. File No. 1/1/2018-CL.I dated 9^th February, 2018.

[23] Substituted for the words “Cost Accountant in practice” by the Companies (Amendment) Act 2017 vide Notification No. File No. 1/1/2018-CL.I dated 9^th February, 2018.

[24] Substituted for the words “who is a cost accountant in practice” by the Companies (Audit and Auditors) Amendment Rules, 2018 vide Notification No. No. F. No. 1/33/2013- CL-V-Part dated 7^th May, 2018.

[25] Substituted for the words “who is a cost accountant in practice” by the Companies (Audit and Auditors) Amendment Rules, 2018 vide Notification No. No. F. No. 1/33/2013- CL-V-Part dated 7^th May, 2018.

[26] Substituted for the words ” services rendered by a Port in relation to a vessel or goods regulated by the Tariff Authority for Major Ports” by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[27] Substituted for the words ” by airports ” by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[28] Inserted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[29] Inserted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[30] Substituted for the words ” Paper” by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[31] Inserted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[32] Inserted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[33] Substituted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018

[34] Inserted by Companies (cost records and audit) Amendment Rules, 2018 vide notification no. F. No. 1/40/2013- CL-V- Part I dated 3rd December, 2018