Cost Audit Cost Sheet

Section 148 of the Companies Act, 2013 lays out the provisions and requirements concerning Cost Records and Cost Audit applicability.

Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 identifies the companies who are required to keep Cost Records, undergo a Cost Audit, and submit Cost Audit Report, in two separate sections defined by

  1. Table A , which covers regulated sectors dealing with specified goods/services and
    1. Overall annual total turnover from all Products/Services is INR 50 Crore or more.
    2. Aggregate turnover from the individual Product/Service is INR 25 Crore or more.
  2. Table B which covers non regulated sectors dealing with specified goods/services and
    1. Overall annual total turnover from all Products/Services is INR 100 Crore or more.
    2. Aggregate turnover from the individual Product/Service is INR 35 Crore or more.

However, companies covered by above rules are exempted from conducting a cost record audit if any of the following situations arise:

  1. The company’s export revenue in foreign exchange exceeds 75% of total revenue
  2. Company operates from a Special Economic Zone (SEZ)
  3. Company is engaged in production of electricity through Captive Generating Plant.