The Companies (cost records and audit) Amendment Rules, 2019

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 15th October, 2019

G.S.R. 792(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) (hereinafter referred as the Act), the Central
Government hereby makes the following rules further to amend the Companies (cost records and audit) Rules,
2014, namely:-
1. (1) These rules may be called the Companies (cost records and audit) Amendment Rules, 2019.
(2) These rules shall be deemed to come into force on the 1st day of April, 2018.
(3) The companies who have already filed their Cost Audit Report in form CRA-4 for the financial
year 2018-19 with the Central Government before the publication of this notification are not required to file
their Cost Audit Report for the said financial year.
2. In the Companies (cost records and audit) Rules, 2014, in the Annexure,-
(a) in Form CRA-1,-
(i) in paragraph 7. Overheads, for sub-paragraphs (m), (q), (r) and (s), the following sub-paragraphs shall
respectively be substituted, namely:-
6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
“(m) Overheads shall be classified according to functions, viz., works, administration, selling and
distribution. Works overheads, also known as Production Overheads, Operation Overheads, Factory
Overheads or Manufacturing Overheads, shall be the indirect costs involved in the production of a
product or in providing service. Administrative overheads shall be the aggregate of cost of resources
consumed in activities relating to general management and administration of an organisation. Selling and
Distribution overheads shall be the aggregate of cost of resources consumed in the selling and
distribution activities of the organization.”;
“(q) In case of leased assets, if the lease is an operating lease, the entire rentals shall be included in the
respective overheads. If the lease is a financial lease, the finance cost portion shall be segregated and
treated as part of finance costs.”;
“(r) Selling and Distribution Overheads, the benefits of which are expected to be derived over a long
period, shall be amortized on a rational basis.”;
“(s) Any demurrage or detention charges or penalty levied by the transportation or other authorities in
respect of distribution activity shall not form part of Selling and Distribution Overheads.”;
(ii) the paragraph 8. Administrative Overheads, shall be omitted;
(iii) in paragraph 9. Transportation Cost, for sub-paragraph (k), the following shall be substituted,
namely:-
“(k) Records for transportation costs for exempted goods, taxable goods cleared for export shall be
maintained separately.”;
(iv) in paragraph 28. Cost Statements, for sub-paragraphs (a) and (c), the following shall respectively be
substituted, namely:-
“(a) Cost statements (monthly, quarterly and annually) showing quantitative information in respect of
each goods or service under reference shall be prepared showing details of available capacity, actual
production, production as per excise records, production as per GST records, capacity utilisation (inhouse), stock purchased for trading, stock and other adjustments, quantity available for sale, wastage and
actual sale, total quantity of outward supplies as per cost records and total outward supplies as per GST
records during current financial year and previous year.”;
“(c) Cost statements (monthly, quarterly and annually) in respect of reconciliation of indirect taxes
showing details of total clearances of goods or services, assessable value/ taxable value, duties or taxes
paid, CENVAT or VAT or Service Tax or GST Credit utilised, duties or taxes recovered and interest or
penalty paid.”;
(b) in Form CRA-3, in Annexure to the Cost Audit Report,-
(I) in Part-A,-
(a) in table 2. General Details of Cost Auditor,-
(i) for item 11, the following shall be substituted, namely:-
“ (11) SRN number of Form CRA-2”;
(ii) for item 12, the following shall be substituted, namely:-
“12(a) Number of audit committee meeting(s) during the year for which Cost Auditor was invited
12(b) Number of audit committee meeting(s) attended by cost auditor during year”;
(b) in table 4. PRODUCT/ SERVICE DETAILS (for the company as a whole),-
(i) or the words “Total Net revenue from Operations”, the words “Total Net Operational Revenue of
Manufactured Product or Service” shall be substituted and thereafter two new rows shall be inserted, namely:-
“Other Operating Incomes of Company
Total Operating Incomes of Company”;
(ii) for the words “Exceptional, Extra Ordinary and Other Comprehensive Income, if any”, the following
shall be substituted, namely:-