MCA notifies Companies (cost records and audit) Amendment Rules, 2019 on 15th October, 2019 with effect from 1st day of April, 2018.
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:-
“(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 (in-house), 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:-
“(i) Exceptional and Extra Ordinary income
(ii) Other Comprehensive Income, if any”;
(iii) for the words “Excise/ Service Tax” the words “Excise / Service Tax/ GST” shall be substituted;
(II) in Part-B,-
(a) in table 1. QUANTITATIVE INFORMATION (for each product with CETA Heading separately), in point 3, for the words “Excise”, the words “Excise/ GST” shall be substituted;
(b) in table 2. ABRIDGED COST STATEMENT (for each product with CETA Heading separately), in point 28, for the word “Interest”, the word “Finance Charges” shall be substituted;
(c) in table 2B. Details of Utilities Consumed, for the word “Material”, the words “Utilities Consumed” shall be substituted;
(III) in Part-C,-
(a) in table 1. QUANTITATIVE INFORMATION (for each service separately),-
(i) in point 3, for the words “Service Tax”, the words “Service Tax/ GST” shall be substituted;
(ii) point 5 shall be renumbered as point 7 and before point 7, so as renumbered, and after point 4, the following points shall be inserted, namely:-
“5. Other Adjustments
(a) Self or Captive Consumption
(b) Other Quantitative Adjustments, if any
(c) Total Other Adjustments
6. Total Available Services for Sale [2(d)+5(c)]”
(b) in table 2. ABRIDGED COST STATEMENT (for each service separately), in point 23, for the word “Interest”, the words “Finance Charges” shall be substituted;
(c) in table 2B. Details of Utilities Consumed, for the word “Material”, the words “Utilities Consumed” shall be substituted;
(IV) in Part-D,-
(a) in table 2. PROFIT RECONCILIATION (for the company as a whole), in point 1, for the words “Accounting Records”, the word “Accounts” shall be substituted;
(b) in table 3. VALUE ADDITION AND DISTRIBUTION OF EARNINGS (for the company as a whole), for points 1, 2, 3, 5 and 9, the following points shall respectively be substituted, namely:-
“1 Revenue from Operations”;
“2 Less: Taxes and other duties”;
“3 Net Revenue from Operations”;
“5 Add/ Less: Adjustment in Stocks”;
“9 Add: (i) Exceptional and Extra Ordinary income
(ii) Other Comprehensive Income, if any”;
(c) in table 4. FINANCIAL POSITION AND RATIO ANALYSIS (for the company as a whole), in point E, item 3 and the entries relating thereto, shall be omitted;
(d) in table 5. RELATED PARTY TRANSACTIONS (for the company as a whole), for the words “Name and Address of the Related Party”, the words “Name and CIN of the Related Party” shall be substituted;
(e) for table 6. Reconciliation of Indirect Taxes (for the company as a whole), the following table shall be substituted, namely:-
“6 Reconciliation of Indirect Taxes (for the company as a whole)
| Particulars | Taxable Value/ Assessable Value | Excise Duty/ VAT, CST, Cess etc./ Other State Taxes, if any | Goods & Services Tax | |||||
| CGST | SGST / UTGST | IGST | Cess and Others | |||||
| Rs. | Rs. | Rs. | Rs. | Rs. | Rs. | |||
| Sl. No. | Duties/ Taxes Payable | |||||||
| Excise Duty | ||||||||
| 1 | Domestic | |||||||
| 2 | Export | |||||||
| 3 | Stock Transfers (Net) | |||||||
| 4 | Others, if any | |||||||
| 5 | Total Excise Duty (1 to 4) | |||||||
| 6 | VAT, CST, Cess etc. | |||||||
| 7 | Other State Taxes, if any | |||||||
| Goods & Services Tax | ||||||||
| 8 | Outward Taxable Supplies (other than zero rated, Nil Rated and Exempted) | |||||||
| 9 | Outward Taxable Supplies (zero rated) | |||||||
| 10 | Inward Supplies (liable to Reverse Charge) | |||||||
| 11 | Other Outward Supplies (Nil Rated, Exempted) | |||||||
| 12 | Non-GST Outward Supplies | |||||||
| 13 | Total (8 to 12) | |||||||
| 14 | Total Duties / Taxes Payable (5 + 6 + 7 + 13) | |||||||
| Duties/ Taxes paid [by Utilisation of Input Tax Credit and Payment through Cash Ledger, as the | case may be] | |||||||
| Input Tax Credit Utilised | ||||||||
| 15 | CGST/ CENVAT | |||||||
| 16 | SGST / UTGST/ VAT | |||||||
| 17 | IGST | |||||||
| 18 | Cess | |||||||
| 19 | Transitional Credit | |||||||
| 20 | Others, if any, specify | |||||||
| 21 | Total Input Tax Credit Utilised (15 to 20) | |||||||
| 22 | Payment through Cash Ledger | |||||||
| 23 | Total Duties/Taxes Paid (21 + 22) | |||||||
| Difference between Taxes Paid and Payable (14 – 23) | ||||||||
| 24 | Interest/Penalty/Fines Paid | |||||||
Explanatory Memorandum : It is certified that no person is being adversely affected by giving retrospective effect to this notification. The proposed amendments have been made on account of introduction of the Goods and Services Tax.
[F. No. 1/40/2013-CL-V Part 1]
K. V. R. MURTY, Jt. Secy.
Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 425 (E), dated the 30th June, 2014 and amended vide number G.S.R. 01(E), dated the 31″ December, 2014 and vide number G.S.R. 486 (E), Dated the 12th June, 2015 and vide number G.S.R. 695 (E), dated the 14th July, 2016 and vide number G.S.R. 1498 (E), dated the 7th December, 2017 and vide number G.S.R. 1526 (E), dated the 20th December, 2017 and vide number G.S.R. 1157 (E), dated the 3rd December, 2018.
This amended rule will certainly add the value of the Cost Audit Report as well as records to the Revenue Authorities at the time of their Audit. Cost Auditors have been assigned a greater role in GST for verification of Books as well as GST Returns. This will help industry also with a view on the monthly reconciliation.