Companies (Cost Records & Audit) Rules 2014
(Rule-1) These Rule shall came into force on the date of publication in the Official Gazette i.e. 30.06.2014.
(Rule-3) Application of Cost Records
For the purpose of sub-section (1) 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, having an overall turnover from all its products and services of rupees 35 crore or more during the immediately preceding financial year, shall include Cost records for such products or services in their books of accounts.
Micro enterprise or a small enterprise as per MSMED Act, 2006 have been taken out of the purview
(Rule-4) Cost Audit
(TABLE-A) Regulated Sector: Sector Where Price and other relevant cost are regulated by government. The Regulated Sectors name are given below covered for cost audit from F.Y 2014-15
1) Telecommunication
2) Generation, transmission, distribution and supply of electricity
3) Petroleum products
4) Drugs and Pharmaceuticals
5) Fertilisers
6) Sugar and industrial alcohol
• Cost Audit is Required only when overall turnover of the company from all of its product and services during the immediately preceeding financial year is Rs. 50 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 25 crore or more
Other clarification:
• If Revenue from Export (Foreign Exchange is more than 75% of total Revenue)
• If Operating in Special Economic Zone
Only Cost Records Are Mandatory and Not Cost
(Table- B) Unregulated Sector: Sectors other than Regulated Sector
1) Coffee & Tea Covered under CETA 0901 to 0902 (All products) 1.1) Milk Powder Covered under Chapter Heading 0402 (All Products)
2) Insecticide Covered under Chapter Heading 3808 (All Products)
3) Plastic & Polymers Covered under Chapter Heading 3901 to 3914; 3916 to 3921; 3925 (All Products)
4) Tyres & Tubes Covered under Chapter Heading 4011 to 4013 (All Products)
5) Paper Covered under Chapter Heading 4801 to 4802 (All Products)
6) Textiles Covered under Chapter Heading 5004 to 5007; 5106 to 5113; 5205 to 5212; 5303; 5310; 5101 to 5408; 5501 to 5516 (All Products)
7) Glass Covered under Chapter Heading 7003 to 7008; 7011; 7016 (All Products)
8) Other Machinery Covered under Chapter Heading 8403 to 8487 (All Products)
9) Electricals or Electronic Machineries Covered under Chapter Heading 8501 to 8507, 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547 (All Products)
10) Articles of Steel Covered under Chapter Heading 7301 to 7326 (All Products)
11) Machinery and mechanical appliances used in defence, space and atomic energy sectors excluding any ancillary item or items
12) Turbo jets and turbo propellers.
13) Arms and ammunitions.
14) Propellant powders; prepared explosives, (other than propellant powders); safety fuses; detonating fuses; percussion or detonating caps; igniters; electric detonators;
15) Radar apparatus, radio navigational aid apparatus and radio remote control apparatus;
16) 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;
17) 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);
18) 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);
19) Roads and other infrastructure projects corresponding to para (1) (a) as specified in Schedule VI of Companies Act, 2013;
20) Rubber and allied products being regulated by the Rubber Board.
21)Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipments of all kind;
22) Cement
23) Ores and Mineral products
24) Mineral fuels (other than Petroleum), mineral oils etc.;
25) Base metals;
26) Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals of radioactive elements or isotopes, and Organic Chemicals;
27) Jute and Jute Products;
28) Edible Oil
29) Construction Industry as per para (5) (a) as specified in Schedule VI of the Companies Act, 2013
30) Health services viz. functioning as or running hospitals, diagnostic centres, clinical centres or test laboratories;
31) Education services, other than such similar services falling under philanthropy or as part of social spend which do not form part of any business.
32) 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.
• Cost Audit is Required only when overall turnover of the company from all of its product and services during the immediately preceeding financial year is Rs. 100 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 35 crore or more
Other clarification:
• If Revenue from Export (Foreign Exchange is more than 75% of total Revenue)
• If Operating in Special Economic Zone
Only Cost Records Are Mandatory and Not Cost Audit