Updates under MCA as on 22nd October 2019

(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. 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 annu