Friday, 9 November 2012

New Cost Audit Orders effective from 1st January 2013

New Cost Audit Orders issued by MCA in supersession to the earlier Cost Audit Orders issued till date


Consequent upon notification of the Product or Activity Group classification published vide S.O. 1747(E) dated 7th August, 2012 and in supersession of the earlier Orders issued vide even number dated 2nd May 2011, 3rd May 2011, 30th June 2011 and 24th January 2012, the Central Government hereby makes the following Order-

A.       Any Company engaged in the production, processing, manufacturing or mining of the products/activities (Mentioned in Table 1) shall get its Cost Accounting Records audited

With Effect from: January 1st, 2013
Applicability:  Aggregate value of Net Worth > Rs 5 crores or Aggregate value of Turnover > Rs 20 crores or Equity/Debt securities are listed in stock exchange


Sl.No.
Product or Activity Group Code
Name of the Product or Activity Group
Central Excise Tariff Act (CETA) Chapter Headings covered in the Product Group or Activity Group
1
1020
Sugar and Sugar Products
1701 to 1702
2

1021
Molasses
1703
3
1027
Ethyl Alcohol and Other Spirits
2207
4
2004
Petroleum Oils – Crude
2709
5
2005
Petroleum Oils – Refined
2710
6
2006
Petroleum Gases and other Gaseous Hydrocarbons
2711
7
2007
Other Petroleum Products
2712-2715
8
2008
Electrical Energy
2716
9
2012
Bulk Drugs
2901 to 2942
10
2015
Pharmaceutical Products
3001 to 3006
11
2016
Animal or Vegetable Fertilisers
3101
12
2017
Mineral or chemical Fertilisers- Nitrogenous
3102
13
2018
Mineral of Chemical Fertilisers – Phosphatic
3103
14
2019
Mineral or Chemical Fertilisers – Potassic
3104
15
2020
Mineral or Chemical Fertilisers – Others
3105
16
5101
Basic telephone Services –Wired and WLL
Not Applicable
17
5102
Cellular Mobile Telephone Services – Wireless and WLL
Not Applicable
18
5103
Internet and Broadband services
Not Applicable
19
5104
National Long Distance Services
Not Applicable
20
5105
International Long Distance Services
Not Applicable
21
5106
Public Mobile Radio Trunk Services
Not Applicable
22
5107
Global Mobile Personal Communication Services
Not Applicable
23
5108
Passive Telecom Infrastructure and Tower facilities
Not Applicable
24
5109
Cable Landing Stations
Not Applicable
25
5121
Broadcasting and related services
Not Applicable
26
5141
Other Communication services not elsewhere specified
Not Applicable
27
5406
Transmission or distribution of electricity
Not Applicable
















B.   Any Company engaged in the production, processing, manufacturing or mining of  
the products/activities  (Mentioned in Table 2) shall get its Cost Accounting Records  
audited 
With Effect from: January 1st, 2013               
Applicability:  Aggregate value of Turnover > Rs 100 crores or  Equity/Debt securities are listed in stock  
                         exchange

Sl.No.
Product or Activity Group Code
Name of the Product or Activity Group
Central Excise Tariff Act (CETA) Chapter Headings covered in the Product Group or Activity Group
1
1002
Meat and Meat Products
0201 to 0210, 0410, 1601 to 1603
2

1003
Marine Products
0301 to 0307, 1604 to 1605
3
1004
Milk and Milk Products
0401 to 0406
4
1005
Poultry and Related Products
0407 to 0408
5
1006
Bee Products
0409
6
1010
Vegetables
0701 to 0714
7
1011
Fruits and Nuts
0801 to 0814
8
1012
Coffee and Coffee Products
(incl.210111)
0901
9
1013
Tea and Tea Products(inc.210120)
0902
10
1014
Spices – Processed or unprocessed
0903 to 0910
11
1015
Cereals , Flour and Products of Cereals
1001 to 1008, 1101 to 11009
12
1016
Oil Seeds and Products of Oil Seeds
1201 to 1208
13
1017
Other Seeds and Plants
1209 to 1214
14
1018
Vegetable Saps or Products
1301 to 1302, 1401, 1404
15
1019
Animal or Vegetable Fats and Oils
1501 to 1518, 1520 to 1522
16
1022
Sugar Confectionery or Chocolates
1704 , 1806
17
1023
Cocoa Products
1801 to 1805
18
1024
Prepared Food Products
1901 to 1905, 2001 to 2009, 2101 to 2106, 2501
19
1025
Mineral Water and Aerated Drinks
2201 to 2202
20
1026
Alcohol Beverages
2203 to 2206, 2208
21
1028
Vinegar
2209
22
1029
Food  Residues or Prepared Animal Feed
2301 to 2309
23
1030
Unmanufactured and Manufactured Tobacco
2401, 2403
24
1031
Tobacco Products
2402
25
2001
Mineral Products
2502 to 2522, 2524 to 2526, 2528 to 2530, 2601 to 2621
26
2002
Cement
2523
27
2003
Mineral Fuels (other than Petroleum)
2701 to 2708
28
2009
Chemical Elecments
2801 to 2805
29
2010
Inorganic Chemicals and their derivatives
2806 to 2837, 2839 to 2850 , 2852 to 2853
30
2011
Organic Chemicals and their Derivatives (excluding Bulk Drugs)
2901 to 2942
31
2013
Albuminoidal Substances, Starches, Glues and Enzymes
3501 to 3507
32
2014
Miscellaneous Chemical Products
3801 to 3807 , 3809 to 3825
33
2021
Tanning Substances
3201 to 3202
34
2022
Colours, Dyes and Pigments
3203 to 3207, 3212
35
2023
Paints and Varnishes
3208 to 3211
36
2024
Inks and Colours
3213 , 3215
37
2025
Plasters and Fillers
3214
38
2026
Essential Oils
3301 to 3302
39
2027
Personal Care Products
3303 to 3307, 8212, 9615 to 9616
40
2028
Soaps , Detergents and Cleaning Agents
3401 to 3402
41
2029
Lubricating Preparations
3403
42
2030
Waxes and Wax Products
3404 to 3407
43
2031
Explosives
3601 to 3603
44
2032
Fireworks, Matches, and Combustible Materials
3604 to 3606
45
2033
Photographic and Cinematographic Goods
3701 to 3707
46
2034
Insecticides
3808
47
2035
Chemicals –Plastics and Polymers
3901 to 3915
48
2036
Articles of Plastics and Polymers
3916 to 3926
49
2037
Rubber and Rubber Products
4001 to 4010, 4014 to 4017
50
2038
Rubber Tyres and Tubes
4011 to 4013
51
3001
Raw Hides, Skins and Leather
4101 to 4107, 4112 to 4115
52
3002
Leather Products
4201 to 4203, 4205 to 4206
53
3004
Wood and Wood Products
4401 to 4421
54
3007
Pulp of Wood and other Substances
4701 to 4707
55
3008
Newsprint
4801
56
3009
Paper and Paperboard
4802 to 4813
57
3010
Articles of Paper and Paperboard
4814, 4816 to 4823
58
3012
Silk
5001 to 5003
59
3013
Silk Yarn
5004 to 5006
60
3014
Silk Fabrics
5007
61
3015
Wool
5101 to 5105
62
3016
Wool Yarn
5106 to 5110
63
3017
Wool Fabrics
5111 to 5113
64
3018
Cotton
5201 to 5203
65
3019
Sewing Thread
5204 , 5401
66
3020
Cotton Yarn
5205 to 5207
67
3021
Cotton Fabrics
5208 to 5212
68
3022
Other Textile Yarns or Fabrics
5301 to 5303, 5305 to 5308
69
3023
Other Textile Fabrics
5309 to 5311
70
3024
Synthetic Yarns or Fibers
5402 to 5406, 5501 to 5511, 5601 to 5609
71
3025
Synthetic Fabrics
5407 to 5408, 5512 to 5516
72
3026
Carpets and Textile Floor Coverings
5701 to 5705
73
3027
Other Textile Fabrics or Products
5801 to 5811, 5901 to 5911, 6301, 6305 to 6310
74
3028
Knitted or Crocheted Fabrics
6001 to 6006
75
3029
Apparel and Clothing
6101 to 6117, 6201 to 6217
76
3030
Furnishings
6302 to 6304
77
3031
Footwear and Parts thereof
6401 to 6406
78
3032
Headgear and Parts thereof
6501 to 6502, 6504 to 6507
79
3036
Articles of Stones , Plaster, Cement, Asbestos and Mica
6801 to 6815
80
3037
Ceramic Products
6901 to 6914
81
3038
Glass and Glass Products
7001 to 7011, 7013 to 7020
82
3039
Pearls , Diamonds , Stones and Jewellary Articles
7101 to 7118
83
4001
Primary Ferrous Materials
7201 to 7205
84
4002
Iron and Non-Alloy Steel
7206 to 7217
85
4003
Stainless Steel
7218 to 7223
86
4004
Other Alloy or Non Alloy Steel
7224 to 7229
87
4005
Steel products
7301 to 7326
88
4006
Copper and Copper Products
7401 to 7413, 7415, 7418 to 7419
89
4007
Nickel and Nickel Products
7501 to 7508
90
4008
Aluminium and Aluminium Products
7601 to 7616
91
4009
Lead and Lead Products
7810 7802;7804;7806
92
4010
Zinc and Zinc Products
7901 to 7905;7907
93
4011
Tin and Tin Products
8001 to 8003;8007
94
4012
Other   Base      Metals    and      their    Products
8101 to 8113;8301 to 8311 
95
4013
Hand Tools
8201 to 8211;8213 to 8215
96
4014
Nuclear Reactors and Accessories
8401
97
4015
Boilers and Acessories
8402 to 8404
98
4016
Engines or Motors and parts thereof
8405 to 8412
99
4017
Machinery and Mechancial applianes
8413 to 8484;8486 to 8487
100
4018
Electric Motors,Generators,Transformers and parts thereof
8501 to 8505
101
4019
Batteries and Accumulators
8506 to 8507
102
4020
Electrical and Electronic Equipments or Appliances
8508 to 8519;8521 to 8523;8525 to 8548
103
4021
Railway Rolling Stock
8601 to 8606
104
4021
Parts of Railway Rolling Stock
8607
105
4023
Railway Track Fixtures and Fittings
8608
106
4024
Containers
8609
107
4025
Commercial Vehicles (3 or more wheels)
8701;8704 to 8707;8709;8716
108
4026
Passenger Vehicles (4 or more wheels)
8702 to 8703
109
4027
Parts and Accessories of Vehicles
8708;8714
110
4029
Passenger Vehicles (2 and 3 Wheelers) - Motorised
8711;8713
111
4030
Passenger Vehicles (2 or 3 Wheelers) – Non Motorised
8712;8713;8715
112
4031
Non-powered Aircraft and parts thereof
8801;8803
113
4032
Aircraft,Spacecraft and parts thereof
8802 to 8803;8805
114
4033
Parachutes and Rotochutes
8804
115
4034
Ships and Boats
8901 to 8904
116
4035
Floating Structures
8905 to 8908
117
4036
Optical Equipments and parts thereof
9001 to 9005;9012 to 9013;9033
118
4037
Photographic or Cinematographic Equipment and parts thereof
9006 to 9008;9010 to 9011;9033
119
4038
Measuring Instruments and parts thereof
9014 to 9017;9023 to 9033
120
4039
Surgical or Medical Instrument and parts thereof
9018 to 9022;9033
121
4040
Clocks or Watches and parts thereof
9101 to 9114
122
4041
Musical Instruments and Parts thereof
9201 to 9202;9205 to 9209
123
4043
Medical or Vehicular or other Furniture and Mattress and parts thereof
9401 to 9404
124
4044
Lights and Fittings
9405
125
4045
Prefabricated Buildings
9406
126
4046
Toys,games and sports Equipments
9503 to 9508
127
4047
Stationery Items
9608 to 9612
128
4048
Miscellaneous manufactured articles
9601 to 9607;9613 to 9614;9617 to 9618






















Notes:

1.      (a) The Product or Activity Groups referred to in Table‐I & II above shall include all products/activities included in the corresponding CETA Chapter Headings mentioned therein irrespective of whether Central Excise Duty is levied or not.

(b) In respect of those Product or Activity Groups mentioned in Table‐I above corresponding to which no CETA Chapter Headings are applicable, the product/activity groups shall include all such activities that fall under the meaning of the respective product/activity group and are covered by the related Cost Accounting Records Rules mentioned in para 2 above.

(c) In case of all such activities that are covered under the Cost Accounting Records Rules mentioned in para 2 above that are also covered under cost audit but for which no Product or Activity Group has been indicated in Table‐I above, companies would use the appropriate Product or Activity Group code as given in the notification issued vide S.O. 1747(E) dated 7th August, 2012.

(d) Any company engaged in the production, processing or manufacturing of such inorganic or organic chemicals or any other substances that are primarily meant for pharmaceutical applications/use and are covered under the Cost Accounting Records (Pharmaceutical Industry) Rules 2011 shall be subject to cost audit as per the terms mentioned in para 2 above, irrespective of whether these are covered in the Product or Activity Groups mentioned in Table‐II above.

(e) Any company engaged in the storage, transportation or distribution of crude oil or gases or biogas or any or all types of petroleum products, and is covered by the Cost Accounting Records (Petroleum Industry) Rules, 2011 shall be subject to cost audit as per the terms mentioned in para 2 above.

(f) Product Group No. 2008 – Electrical Energy mentioned in Table‐I above would mean and be understood as generation of electrical energy or generation of electricity.

(g) Product Group No. 1026 – Alcoholic Beverages mentioned in Table‐II above would mean and include all products/activities covered in the Chapter Headings 2203 to 2208 of the Customs Tariff Act, 1975 (51 of 1975), excluding products of CETA Chapter Heading 2207 to the extent these are covered in the Cost Accounting Records (Sugar Industry) Rules, 2011.

(h) In case of any Product or Activity Group where multiple units of measurement are in use for the products or activities covered therein, then the relevant Product or Activity Group shall be repeated against each unit of measurement separately.

(i) Wherever same CETA Chapter Headings have been shown against two or more Product or Activity Groups, the actual details shall be shown against the most ppropriate Product or Activity Group.

2. Every company to which these orders apply shall get its cost accounting records audited in respect of each of its financial year commencing on or after the 1st day of January 2013, irrespective of whether the same was covered or not, either under the company specific cost audit orders issued prior to 31st March 2011 or under the industry specific cost audit orders issued after 1st April 2011 till date.

3. All companies that were earlier covered under industry specific orders dated 2nd May 2011 or 30th June 2011 or 24th January 2012 [subject to their meeting with the qualifying criteria mentioned therein] shall continue to comply with the earlier orders upto the financial year commencing prior to the 1st day of January 2013 and in continuum, with these orders in respect of each of its financial year commencing on or after the 1st day of January 2013.

4. Every company to which these orders apply shall follow the revised procedure for appointment of cost auditor as laid down vide Ministry of Corporate Affairs’ General Circular No. 15/2011 dated 11th April 2011 [as amended vide General Circular No. 36/2012 dated 6th November 2012].

5. The audit shall be conducted in such manner as will enable the cost auditor to prepare the report in accordance with the Companies (Cost Audit Report) Rules, 2011 read with the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011, both as amended. The report of the cost Auditor shall be forwarded to the central government , either by himself or by the lead cost auditor, in the prescribed XBRL format within the time stipulated under the Companies (Cost Audit Report) Rules, 2011.

6. If a company contravenes any provisions of these orders, the company and every officer thereof who is found to be in default, including the persons referred to in subsection (6) of section 209 of companies Act, 1956, shall be punishable as per provisions under subsection 2 of section 642 read with sub-section (11) of 233B of the companies Act , 1956 (1 of 1956)

7. These ordrs are subject to various clarifications issued by the ministry of Corporate Affairs on the subject of cost audit; to the extent these are relevant and applicable. Any specific exemptions granted earlier to certain class of activities shall remain in force till further orders.



CMA Krishna Dasan.A
Mob:98711-28831
Email: aknair2002@cmaglobal.net.in