Cost Audit Applicability: 2011-12 and 2012-13
Maximum Organisations Covered vide new Cost Audit Orders dated 24 Jan 2012;;;
The Ministry of Corporate affairs has issued various Cost audit orders since 2/5/2011 and the latest cost audit order has been issued on 24/01/2012. Various industries are being brought under cost audit and also there is remarkable shift from the earlier practice of issuing companywise cost audit orders to industrywise cost audit order, that too on based on Excise classification codes. Also through various cost audit orders, the Ministry has clearly aligned the reporting of products under cost audit with the Central Excise Tariff Classification Codes.
The Ministry of Corporate Affairs issued the following Cost audit orders:
Date of order
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Industries Covered Broadly
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Applicability -Conditions
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Year for which applicable
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2nd May 2011
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1) Cost Accounting Records (Bulk Drugs) Rules, 1974
2) Cost Accounting Records (Fortmulations) Rules, 1988
3) Cost Accounting Records (Fertilizers) Rules, 1993
4) Cost Accounting Records (Sugar) Rules, 1997
5) Cost Accounting Records (Industrial Alchohal) Rules, 1997
6) Cost Accounting Records (Electricity Industry) Rules, 2001
7) Cost Accounting Records (Petroleum Industry) Rules, 2002
8) Cost Accounting Records (Telecommunications) Rules, 2002
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a) Aggregate Value of networth as on the last day of immediately preceding financial year year exceeds Rs. 5 Crores, or
b) wherein the aggregate value of the turnover made by the company from sale or supply of all products or activitiesduring the immediately preceding financial year exceeds twenty crores of rupees;or
c) wherein the company's equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India
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2011-12
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3rd May 2011
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The order was modified vide order dated 30/06/2011
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30th June 2011
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Product/Industry under Cost Audit
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HSN Classification/Central Excise Tariff Act
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Cement
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Chapter 25, 38 and 68
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Tyres and Tubes
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Chapter 40
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Steel
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Chapter 72 and 73
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Paper
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Chapter 47 and 48
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Insecticides*
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Chapter 38
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Glass
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Chapter 70
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Paints and varnishes
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Chapter 32
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Aluminium
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Chapter 25
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a) Companies having turnover exceeding Rs 100 crores in the immediately preceding financial year
b) Companies whose equity or debt securities are listed or are in the process of listing
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2011-12
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24th Jan 2012
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Name of Industry
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Relevant Chapter Heading of the Central Excise Tariff Act 1985
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Jute, Cotton,silk,woolen,or blended fibres/textiles
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Chapter 50 to 63
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Edible Oil seeds and Oils (incl. Vanaspati)
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Chapter 12 and 15
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Packaged Food Products
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Chapter 2 to 25 (except chapters 5,6,14,23 and24)
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Organic and Inorganic Chemicals
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Chapter 28, 29, 32, 38 and 39
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Coal & lignite
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Chapter 27
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Mining & metallurgy of ferrous and no ferrous metals
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Chapters 26 and 74 to 83 (except Chapters 76 and 77)
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Tractors & other motor vehicles (incl. automotive components)
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Chapter 84, 85 and 87
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Plantation Products
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Chapter 8, 9, 21 and 40
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Engineering machinery (incl. electrical & electronic products)
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Chapters 84 and 85
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a) Companies having turnover exceeding Rs 100 crores in the immediately preceding financial year
b) Companies whose equity or debt securities are listed or are in the process of listing
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2012-13
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Steps to check the applicability of cost audit
Various parameters to check the applicability of Cost audit are:
I) Turnover of the company
II) Listing Status
III) Net Worth
IV) Central Excise Classification Code
V) Specific Industry Nature of the company
1) Check the industries as mentioned above. Firstly Go through your excise return and check whether any of the products is cleared under any of the excise classification codes mentioned above, or the company falls under any of the industry covered under cost audit order dated 2nd May 2011
2) If Not, your company is not covered under cost audit apparently provided the same has not been covered specifically earlier
3) If yes,
a. please check the turnover of the company for the year 2010-11 in respect of the companies where applicability year is 2011-12 and for the year 2012-13 where cost audit applicability is from the year 2012-13
b. Also check whether the company is listed or not in case of companies covered through Excise classification codes
c. Where companies are covered under order dated 2nd may 2011, the networth criteria needs to be checked
A) The companies are required to see if any one of the following criteria is fulfilled for companies falling under orders dated 3rd May, 30th June and 24 Jan 2012, the company is covered under cost audit
a) Companies having turnover exceeding Rs 100 crores in the immediately preceding financial year,
or
b) Companies whose equity or debt securities are listed or are in the process of listing
B) The companies are required to see if any one of the following criteria is fulfilled for companies falling under orders dated 2nd May 2011, the company is covered under cost audit
a) Aggregate Value of networth as on the last day of immediately preceding financial year year exceeds Rs. 5 Crores, or
b) Companies having turnover exceeding Rs 20 crores in the immediately preceding financial year, or
c) Companies whose equity or debt securities are listed or are in the process of listing
We request you to contact us at 9810175020 in case of any further query.
Regards,
Navneet Kumar Jain
FCMA, MBA., LL.B., M.COM., PGDTL, AIIISLA., LIII
For N.K. Jain And Associates
9810175020
navneetic@yahoo.com,navneetic@rediffmail.com
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