Audit of items of Cost : Section -148.

• The Central Government may direct
• Companies engaged in the production of such goods or
• Providing such services
• maintain  particulars relating to the cost records in the books of account kept by such companies.
• Cost records shall comprise particulars relating to utilization of material or labour or other items of cost and maintained in form CRA-1.
• Central Government shall  before issuing such direction consult the regulatory body.

 

Applicability of Cost Record: Section -148.

Mandatory Cost Records

The Class of companies Including Foreign Companies

• engaged in production of specified goods and
• having an overall turnover of Rs. 35 cr. or more during preceding Financial year
• shall be required to include cost records in their books of account.

Classes of Companies as specified are

• Regulated Sectors
• Non-regulated sectors

 

Regulated Sectors –Comprehensively revised now

• Telecommunication regulated by the Telecom Regulatory Authority of India under the Telecom Regulatory
• Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 (36 of 2003)
• Petroleum products under the Petroleum and Natural Gas Regulatory Board Act, 2006
• Drugs and pharmaceuticals
• Fertilizers
• Sugar and industrial alcohol

 

Non-regulated Sectors- List newly notified

33 items are provided under Non –Regulated Sector including:

• Machinery and mechanical appliances used in defence, space and atomic energy sectors.
• Turbo jets and turbo propellers;
• Arms, ammunitions and Explosives;
• Propellant powders; prepared explosives.
• Radar apparatus, radio navigational aid apparatus and radio remote control apparatus.
• Tanks and other armoured fighting vehicles
• Port services of stevedoring, pilotage, hauling, mooring, re-mooring, hooking, measuring, loading and unloading services rendered by a Port.
• Aeronautical services of air traffic management etc.                                               …………………………many more

Applicability of Cost Audit : Section -148.