Latest Cost Audit Orders and Its Applicability at a Glance

Latest Cost Audit Orders and Its Applicability at a Glance

Cost Audit Order-1

            As per Order issued by Ministry of Corporate Affairs (Cost Audit Branch) dated 2^nd May, 2011 every company, which is engaged in the production, processing, manufacturing or mining activities shall get its Cost Accounting Records, in respect of each of its financial year commencing on or after the 1^st day of April, 2011, audited by a Cost Auditor who shall be the , either a cost accountant or a firm of cost accountant, holding valid certificate of practice under the provisions of Cost and Works Accountants Act,1959 (23 of 1959) if Any one of  the following condition is satisfied.

1.      The aggregate value of net worth as on the last date of  the immediately preceding financial year exceeds 5 crores of rupees; OR

2.       The aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds 20 crores of rupees; OR

3.      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.

This order is applicable to following industries

Sr. No.	Name of Industry	Applicable CARR
1	Bulk Drugs	Cost Accounting Records (Bulk Drugs) Rules,1974
2	Formulations	Cost Accounting Records (Formulations) Rules,1988
3	Fertilizers	Cost Accounting Records (Fertilizers) Rules1993
4	Sugar	Cost Accounting Records (Sugar) Rules,1997
5	Industrial Alcohol	Cost Accounting Records (Industrial Alcohol) Rules,1997
6	Electricity Industry	Cost Accounting Records (Electricity Industry) Rules,2001
7	Petroleum Industry	Cost Accounting Records (Petroleum Industry) Rules,2002
8	Telecommunications	Cost Accounting Records (Telecommunications) Rules,2002

Note: These orders do not apply to a company which is a body corporate governed by any special Act.

Cost Audit Order-2

As per Order issued by Ministry of Corporate Affairs (Cost Audit Branch) dated 30^th June, 2011 (in modification of the earlier Order of even number dated 3^rd May 2011) every company, including a foreign company as defined under section 591 of the Act, which are engaged in the production, processing, manufacturing or mining of the following products /activities, including intermediate products and articles or allied products thereof  shall get its Cost Accounting Records, in respect of each of its financial year commencing on or after the 1^st day of April, 2011, audited by a Cost Auditor who shall be the , either a cost accountant or a firm of cost accountant, holding valid certificate of practice under the provisions of Cost and Works Accountants Act,1959 (23 of 1959) if Any one of  the following condition is satisfied.

1.      The aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds 100 crores of rupees; OR

2.      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.

This order is applicable to following industries

Sr. No.	Name of the Industry	Relevant Chapter Heading of the Central Excise Tariff Act, 1985
1	Cement	Chapter 25, 38 and 68
2	Tyres & Tubes	Chapter 40
3	Steel	Chapter 72 and 73
4	Paper	Chapter 47 and 48
5	Insecticides*	Chapter 38
6	Glass	Chapter 70
7	Paints & Varnishes	Chapter 32
8	Aluminum	Chapter 76

Note:

1.      Intermediate products and articles or allied products of above industries if included under any other Chapter of the Central Excise Tariff Act, 1985 not mentioned above shall also be covered under these orders.

2.      *Insecticides includes all classes of insecticides as defined under clause (e) of section 3 of the Insecticides Act, 1968 (46 of 1968) and included in the schedule annexed to the said Act and as amended from time to time.

3.      These orders do not apply to a company which is a body corporate governed by any special Act.

Cost Audit Order-3

As per Order issued by Ministry of Corporate Affairs (Cost Audit Branch) dated 24^th January, 2012,  every company, including a foreign company as defined under section 591 of the Act, which are engaged in the production, processing, manufacturing or mining of the following products /activities, including intermediate products and articles or allied products thereof  shall get its Cost Accounting Records, in respect of each of its financial year commencing on or after the 1^st day of April, 2012, audited by a Cost Auditor who shall be the , either a cost accountant or a firm of cost accountant, holding valid certificate of practice under the provisions of Cost and Works Accountants Act,1959 (23 of 1959) if Any one of  the following condition is satisfied.

1.      The aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds 100 crores of rupees; OR

2.      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.

This order is applicable to following industries

Sr. No.	Name of the Industry	Relevant Chapter Heading of the Central Excise Tariff Act, 1985
1	Jute, cotton, silk, woolen or blended fibers/textiles	Chapters 50 to 63
2	Edible oil seeds and oils (incl. vanaspati)	Chapters 12 and 15
3	Packaged food products	Chapters 2 to 25 (except Chapters 5, 6, 14, 23 and 24)
4	Organic & Inorganic Chemicals	Chapters 28, 29, 32, 38, and 39
5	Coal & Lignite	Chapter 27
6	Mining & Metallurgy of ferrous & non-ferrous metals	Chapters 26 and 74 to 83 (except Chapters 76 and 77)
7	Tractors & other motor vehicles (incl. automotive components)	Chapters 84, 85 and 87
8	Plantation Products	Chapters 8, 9, 21 and 40
9	Engineering machinery (incl. electrical and electronic products)	Chapter 84 and 85

Note:

1.      Intermediate products and articles or allied products of above industries if included under any other Chapter of the Central Excise Tariff Act, 1985 not mentioned above shall also be covered under these orders.

2.      Items falling under above Chapter references exclude those products that have been already covered vide cost audit orders dated 2^nd May 2011and 30^th June 2011.

3.      Products falling under above Chapter references are to be considered against the respective industry as applicable.

4.      These orders do not apply to a company which is a body corporate governed by any special Act.

Sources : www.icwai.org