Penal provisions for non- compliance of cost audit report

Discover the penal provisions for non-compliance of cost audit reports under Section 148 of the Companies Act, 2013, and ensure timely submission to avoid penalties.

What is Cost audit report under section 148 of companies act, 2013? What are the penal provisions for industry if non- compliance of cost audit report?

Cost Audit Report is a report prepared by a Cost Auditor appointed by a company under Section 148 of the Companies Act, 2013. The purpose of the Cost Audit Report is to provide an opinion on the accuracy of the cost records maintained by the company and to report on the adequacy of the company’s cost accounting systems.

The Cost Audit Report should contain the following information:

1. A statement of compliance with the cost accounting standards as specified by the government.

2. An opinion on the accuracy of the cost records maintained by the company.

3. Recommendations for improvement in the company’s cost accounting systems, if any.

4. Any other observations or comments deemed appropriate by the Cost Auditor.

Penal provisions for non-compliance of the Cost Audit Report under Section 148 of the Companies Act, 2013 are as follows:

1. Penalty for Non-Submission of Cost Audit Report: If a company fails to submit the Cost Audit Report within the prescribed time, then it may attract a penalty of up to Rs. 1,00,000/-.

2. Imprisonment for Non-Compliance: If a company does not comply with the provisions of Section 148, then the officers in default shall be punishable with imprisonment for a term which may extend up to one year or with fine which shall not be less than Rs. 10,000/- but which may extend up to Rs. 1,00,000/- or with both.

3. Penalty for Providing False Information: If any person provides false information in the Cost Audit Report, then he/she shall be punishable with imprisonment for a term which may extend up to one year or with fine which shall not be less than Rs. 25,000/- but which may extend up to Rs. 5,00,000/- or with both.

Therefore, it is important for companies falling under specified classes of industries to comply with the provisions of Section 148 and ensure timely submission of the Cost Audit Report to avoid any legal penalties.