The Companies (Cost Records and Audit) Rules, 2014

Rule 4 Applicability for cost audit

Chapter: I · Application

1(1) Every company specified in item (A) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees fifty crore or more and the aggregate turnover of the individual product or products or service or services for which cost records are required to be maintained under rule 3 is rupees twenty five crore or more.

1(2) Every company specified in item (B) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees one hundred crore or more and the aggregate turnover of the individual product or products or service or services for which cost records are required to be maintained under rule 3 is rupees thirty five crore or more.

1(3) The requirement for cost audit under these rules shall not apply to a company which is covered in rule 3, and

1(i) whose revenue from exports, in foreign exchange, exceeds seventy five per cent of its total revenue; or

1(ii) which is operating from a special economic zone.

2(iii) which is engaged in generation of electricity for captive consumption through Captive Generating Plant. For this purpose, the term "Captive Generating Plant" shall have the same meaning as assigned in rule 3 of the Electricity Rules, 2005.

1. Rule 4 subs. by G.S.R. 01(E), dated 31st December, 2014 (Companies (Cost Records and Audit) Amendment Rules, 2014), w.e.f. 31st December, 2014, for the former rule 4, which set tiered turnover/net-worth thresholds by reference to sub-clauses of rules 3(A)-(D) rather than the flat rupees fifty crore/rupees twenty five crore (item A) and rupees one hundred crore/rupees thirty five crore (item B) thresholds now in force.

2. Clause (iii) ins. by G.S.R. 695(E), dated 14th July, 2016 (Companies (Cost Records and Audit) Amendment Rules, 2016), w.e.f. 14th July, 2016.

[4. Applicability for cost audit.- (1) Every company specified in item (A) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees fifty crore or more and the aggregate turnover of the individual product or products or service or services for which cost records are required to be maintained under rule 3 is rupees twenty five crore or more.

(2) Every company specified in item (B) of rule 3 shall get its cost records audited in accordance with these rules if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is rupees one hundred crore or more and the aggregate turnover of the individual product or products or service or services for which cost records are required to be maintained under rule 3 is rupees thirty five crore or more.

(3) The requirement for cost audit under these rules shall not apply to a company which is covered in rule 3, and

(i) whose revenue from exports, in foreign exchange, exceeds seventy five per cent of its total revenue; or

(ii) which is operating from a special economic zone.]

[(iii) which is engaged in generation of electricity for captive consumption through Captive Generating Plant. For this purpose, the term "Captive Generating Plant" shall have the same meaning as assigned in rule 3 of the Electricity Rules, 2005.]