CMA-Rules- Amendment of the Companies 'Cost Records and Audit 2016 Rules'

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 Companies 'Cost Records and Audit 2016 Rules

The MCA amended the Company Rules (cost records and audits), 2014 by Notification dated 14 July 2016 on the "Rules for Modification of Accounts (Audit of Costs and Audit), 2016", as follows:

Amendment of the Companies 'Cost Records and Audit 2016 Rules

Notification MCA dt. 14 July 2016

In exercising its powers under subsections (1) and (2) of section 469 and section 148 of the Companies Act 2013 (hereinafter referred to as the Act), the central government shall adopt the rules To modify the Company Rules (Cash and Audit), 2014, namely:

1. These rules may be referred to as the Company Modification Rules (Cost Records and Audit), 2016. (2) They shall enter into force on the date of their publication in the Official Journal.

2. In the Companies Rules (Cost Records and Audit), 2014 (hereinafter the Principal Rules) .

(I) in Article 2, subparagraph (d), the following provision is replaced by the following:

(D) "Cost audit report" means the duly signed cost auditor's report on the expense records reviewed and cost statements prepared in accordance with this Regulation, including the seizure, schedule, qualifications or Annexed to or included in the said report;

(Ii) in Rule 3, for Table A and Table B, the following tables are replaced:

TABLE (A) Regulated Sectors with Tariff numbers

1. Telecommunication services made available to users by the transmission or reception of signs, signals, writings, images and sounds or information of any kind whatsoever and regulated by the Regulatory Authority Telecommunication Authority of India under the Telecommunications Regulatory Authority Act 1997 of 1997); Including activities requiring an authorization or license issued by the Department of Telecommunications of the Government of India under the Indian Telegraphs Act of 1885 (13 of 1885); Not applicable.

2. The production, transmission, distribution and supply of electricity regulated by the competent authority or regulatory authority under the Electricity Act, 2003 (36 of 2003); Generation-2716; Other activity - Not applicable

3. Petroleum products; Includes activities regulated by the Petroleum and Natural Gas Regulatory Council under the Petroleum and Natural Gas Regulatory Authority Act, 2006 (19 of 2006); 2709-2715;

4. Medicines and pharmaceuticals; 2901-2942;

5. Fertilizers; 3102-3105.

6. Sugar and industrial alcohol; 1701; 1703;

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(B) Non-Regulated Sectors

1. Machinery and mechanical appliances used in the defense, space and atomic energy sectors, excluding any auxiliary element or element;
Explanation.- For the purposes of this subclause, any company that is engaged in one or more articles supplied exclusively for use under this clause shall be deemed to be covered by these rules-8401; 8801-8805; 8901-8908

2. Turbo jets and turbo propellers; 8411

3. Weapons, ammunition and explosives; 3601-3603; 9301-9306.

4. Propellant powders; Prepared explosives (other than propellant powders); Safety fuses; Detonating fuses; Percussion or detonation plugs; Lighters; Electric detonators; 3601-3603

5. Apparatus for radar, radionavigation apparatus and radio remote control apparatus; 8526

6. Tanks and other armored combat vehicles, motorized, whether or not fitted with weapons and parts thereof, which are financed (investments made in the enterprise) up to a maximum of ninety per cent or More by the government or public bodies; 8710

7. Port services for the securing, steering, hauling, mooring, towing, hanging, measuring, loading and unloading services provided by a port in connection with a ship or goods regulated by the Tariff authority of the main ports; Not applicable.

8. Aeronautical Services for Air Traffic Management, Aircraft Operations, Ground Safety Services, Ground Handling, Freight Facilities and Fuel Delivery Provided by Airports and Regulated by the Regulatory Authority Economic development of the airport under the Airport Economic Regulatory Authority Act, 2008); Not applicable

9. Iron and steel; 7201-7229; 73

10. (1) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013); Not applicable.

11. Rubber and allied products; Including products regulated by the Rubber Board constituted under the Rubber Act, 1947 (XXIV of 1947); 4001 to 4017

12. Coffee and tea; 0901 to 0902

13. Railway or tramway locomotives, rolling stock, railway or tramway fixtures and fittings, mechanical (including electro mechanical) 8601 to 8608.

14. Cement; 2523; 6811 to 6812

15. Ores and Mineral products; 2502 to 2522; 2524 to 2526; 2528 to 253 2601 to 2617
16. Mineral fuels (other than Petroleum), mineral oils etc .; 2701 to 2708
17. Base metals; 7401 to 7403; 7405 to 7413; 7419; 7501 to 7508; 7601 to 7614; 7801 to 7802; 7804; 7806; 7901 to 7905; 7907; 8001; 8003; 8007; 8101 to 8113.
18. Inorganic chemicals, organic or inorganic compounds of precious metals, rare-earth metals of radioactive elements or isotopes, and organic chemicals; 2801 to 2853; 2901 to 2942; 3801 to 3807; 3402 to 3403; 3809 to 3824.

19. Jute and Jute Products; 5303, 5310

20. Edible Oil; 1507 to 1518
21. Construction Industry as per para No. (5) (a) as specified in Schedule VI of the Companies Act, 2013 (18 of 2013); Not applicable.

22. Health services, diagnostic centers, clinical centers or test laboratories; Not applicable.
23. Education services, other than such similar services falling under philanthropy or as part of any business; Not applicable.

24. Milk powder; 0402
25. Insecticides; 3808

26. Plastics and polymers; 3901 to 3914; 3916 to 3921; 3925
27. lyres and tubes; 4011 to 4013
28. Paper; 4801 to 4802.

29. Textiles; 5004 to 5007; 5106 to 5113; 5205 to 5212; 5303; 5310; 5401 to 5408; 5501 to 5516
30. Glass; 7003 to 7008; 7011; 7016

31. Other machinery and Mechanical Appliances; 8402 to 8487

32. Electricals or electronic machinery; 8501 to 8507; 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547.

33. Production, import and supply of medicinal products, namely: - (i) Cardiac stents; (Ii) Drug eluting stents; (Iii) Catheters; (Iv) Intra ocular lenses; (V) Bone cements; (Vi) Heart valves; (Vii) Orthopedic implants; (Viii) Internal prosthetic replacements; (Ix) Scalp vein set; (X) Deep brain stimulator; (Xi) Ventricular peripheral shud; (Xii) Spinal implants; (Xiii) Automatic impalpable cardiac deflobillator; (Xiv) Pacemaker (temporary and permanent); (Xv) The ductus arteriosus, atrial septal defect and ventricular septal defect closure device; (Xvi) Cardiac re-synchronizes therapy; (Xvii) Urethra spinicture devices; (Xviii) Sling male or female; (Xix) Prostate occlusion device; And (xx) Urethral stents: 9018 to 9022
(Iii) in rule 4, in sub-rule (3), after clause (ii), following clause shall be inserted,

"(Iii) Captive Generating Plant. For this purpose, the term "Captive Generating Plant" shall have the meaning ascribed to it in the Electricity Rules, 2005 ";

(Iv) in rule 6, in sub-rule (1), the following provision shall be inserted, namely:

"Provided that before the appointment is made, the written consent of the cost auditor to such appointment, and a certificate from him or her, as provided in sub-rule (1A), shall be obtained";

(V) In rule 6, after sub-rule (1), the following sub-rule shall be inserted, namely: -

"(1A) The cost auditor appointed under sub-rule (1) shall submit a certificate that-

(A) the individual or firm, as the case may be, is eligible for appointment under the Act, the Cost and Works Accountants Act, 1959 (23 of 1959) and the rules or regulations made thereunder;

(B) the individual or firm, as the case may be,.

(C) the proposed appointment within the limits laid down by or under the authority of the Act; And

(D) the list of proceedings against the auditor or auditor, or any partner of the audit firm;

(Vi) in rule 6, in sub-rule (3), the following provisions shall be inserted, namely: -

"Provided that the cost auditor appointed under these rules may be removed from his office before the expiration of his term, through a board resolution after giving a reasonable opportunity to be heard to the cost auditor;

Provided further that the Form CRA-2 to be filed with the Central Government for the purpose of enabling

Provided also that nothing in this sub-rule shall prejudice the right of the auditor to resign from such

(vii) in rule 6, after sub-rule (3A), following sub-rule shall be inserted, namely:-

“(3B) The cost statements, including other statements to be annexed to the cost audit report, shall be approved by the Board of Directors before they are signed on behalf of the Board by any of the director authorised by the Board, for submission to the cost auditor to report thereon”;

(viii) in rule 6,for sub-rule (5), the following sub-rule shall be substituted, namely:-

“(5) Every cost auditor shall forward his duly signed report to the Board of Directors of the company within a period of one hundred and eighty days from the closure of the financial year to which the report relates and the Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.” ;

(ix) in rule 6, for sub-rule (6), the following sub-rule shall be substituted, namely :-

“(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-4 in 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 along with fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”.

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 31st December, 2014 and vide number G.S.R. 486 (E), Dated the 12th June, 2015
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Click here for comments
Sun Ivey
6 February 2017 at 06:18 ×

Oh wow, that's interesting. Haven't heard about it yet. Speaking about internet and technologies these days. It helps us live easier. Like now I store my paperwork in the online data room. I know it's safe for sure.

Congrats bro Sun Ivey you got PERTAMAX...! hehehehe...