Amendments in Companies Cost Records and Audit Rules

Editor 04 Dec 2018 3,162 Views 0 comment Print Company Law | Articles

CMA Navneet Kumar Jain

MCA amends Companies Cost Records and Audit Rules.

New HSN codes included and UOM defined for reporting purposes

The much awaited demand of the stake holders with regard to the fine-tuning of Companies Cost Records and Audit Rules has been met with though not fully by the Ministry of Corporate Affairs.

The amendments have modified the few words in the rules to widen the scope and some more HSN codes have been included through the amendments date 3rd Dec 2018.

There was always confusion whenever there was an extension of the date of holding of Annual General Meeting about the date of filing of Cost Audit Report with MCA. Now the same has been settled and it has been clarified that the companies can file the CRA-4 with MCA within the extension period.

The amendments mainly pertain to

a) Modification of few words

b) Inclusion more HSN codes

c) Automatic extension in the last date of filing of CRA-4 (Cost Audit Report in XBRL) in case of AGM extension

d) Unit of Measurement defined for cost records purposes and aligned with Customs Tariff Act based on which HSN codes under GST have been mandated.

It is normal for accompany to use different UOM for sale purposes but for the purposes of maintenance of cost records, the UOM as mentioned in CTA codes against relevant HSN codes has to be used. It seems that the same is being aligned with GST UOM. The maintenance of cost records has been mentioned in CRA-1 and there has been specific addition in the CRA-1 as item 31 which states

Unit of Measurement

Existing

After amendments (The amendments are given in the Italics bold fonts

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);

Not applicable

Port services of stevedoring , pilotage, hauling, mooring, re-mooring, hooking, measuring , loading and unloading services rendered for 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);

Not applicable

Now the companies providing services as given above for the port are now required to maintain cost records. Earlier the services by the port only were covered.

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);

Not applicable

Aeronautical services of air traffic management, aircraft operations, ground safety services, ground handling, cargo facilities and supplying fuel rendered at the airports and regulated by the Airports Economic Regulatory Authority under the Airports Economic Regulatory Authority of India Act 2008,(27 of 2008);

Not applicable

The scope seems to have widened as the companies providing the specific services as above at the airports which are regulated by the AERA will now be required to maintain cost records under section 148 of the Companies Act 2018.

13.

Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipment’s of all kind;

8601 to 8608.

13.

Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) traffic signalling equipment’s of all kind;

8601 to 8608, 8609

8609 HSN code refers to the containers

19.

Jute and Jute Products;

5303,5310

19.

Jute and Jute Products;

5303,5307, 5310

5307 refers to Yarns of Jute or of other Textile Bast Fibres

28.

Paper;

4801 to 4802.

28.

Pulp and Paper;

4701 to 4704, 4801 to 4802.

4701 to4704 includes mechanical and chemical wood pulps of various types

29.

Textiles;

5004 to 5007;5106 to 5113;5205 to 5212;5303; 5310;5401 to 5408;5501 to 5516

29.

Textiles;

5004 to 5007;5106 to 5113;5205 to 5212;5303; 5307, 5310;5401 to 5408;5501 to 5516

33.

Production, import and supply or trading of following medical devices, namely:-

(xiii) Automatic impalpable cardiac deflobillator;

9018 to 9022

33.

Production, import and supply or trading of following medical devices, namely:-

(xiii) Automatic impalpable cardiac defibrillators;

9018 to 9022

Automatic extension of Period for filing of Cost Audit Report extended in case there is an extension of holding of Annual General Meeting

The long pending demand of the industry has been met with regard to the simultaneous extension in the filing of Cost Audit Report in case the extension of holding of Annual General Meeting is granted by MCA. After Rule 6(6) the provision as given in the bold and underline font has been added.

“(6) Every company covered under these rules shall, within a period of thirty days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report alongwith full information and explanation on every reservation or qualification contained therein, in Form CRA-4in Extensible Business Reporting Language format in the manner as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting language) Rules, 2015 alongwith fees specified in the Companies (Registration Offices and Fees) Rules, 2014

Provided that the Companies which have got extension of time of holding Annual General Meeting under section 96(1) of the Companies Act, 2013, may file form CRA-4 within resultant extended period of filing of financial statement under section 137 of the Companies Act, 2013

Please feel free to seek any clarification further at 9810175020

Readers are requested to refer to the main notification for further clarification. The views expressed here are personal and authorities/other person any have different point of view.

In case of any clarifications, please feel free to contact us at navneetic@yahoo.com