Section
148 of the Companies act 2013 provides the provision of Cost Audit and The
Central Government issued Companies (Cost Records and Audit) Rules, 2014 on
June 30, 2014.
Government
needs authentic and reliable data of cost for various purposes like price
fixation of controlled commodities. The information is also useful in various
decisions like fixation of duty drawback, export incentives; amount of excise
duty the product can bear, deciding whether special incentives are required to
a particular industry etc.
There
are certain and rules have been provided for regulation and working of Cos
Audit.
Subsequently,
various amendments are carried out in the above rules as enumerated below from
time to time till date:
The Companies (Cost Records
and Audit) Amendment Rules, 2014 dated 31/12/2014
This amendment brought the
changes as pointed below:
i.
Definition of Central excise tariff heading given
ii.
Rule 3 – Application of cost records substituted – Table A and Table B added
iii.
Rule 4 – Applicability of cost audit substituted – Table A and Table referred
iv.
Proviso to Rule 5(1) inserted.
v.
Rule 6(3A) inserted – to give the provision to fill the casual vacancy within
30 days.
vi.
Rule 7 (Rules not to apply in certain cases) omitted
vii.
Form CRA-1 and CRA 3 substituted
2. The Companies (cost
records and audit) (Amendment) Rules, 2015 dated 12/06/2015
This amendment brought the
changes as pointed below:
i.
Amendment in CRA-2 & CRA-4
3. The Companies (cost
records and audit) (Amendment) Rules, 2015 dated 14/12/2015
This amendment brought the
changes as pointed below:
i.
Rule 13 of The Companies (Cost Records and Audit) Rules, 2014 was substituted
with new clause
4. The Companies (cost
records and audit) (Amendment) Rules, 2016 dated 14.07.2016
This amendment brought the
changes as pointed below:
i.
Definition of cost audit Report is substituted with the new one
ii.
Table A and Table B given under Rule 3 are substituted.
iii.
Rule 4(3)(iii) is inserted to include captive generation plant.
iv.
proviso to Rule 6 (1) written consent of the cost auditor is required to be
obtained.
v.
Rule 6(1A) inserted to include certificate from cost auditor in terms of
section 141
vi.
Proviso to Rule 6 (3) inserted for removal of cost auditor before expiry of
term.
vii.
Rule 6(3B) inserted to include approval of Board of directors for the cost
statements and annexures of cost audit report before signed on behalf of board.
viii.
Rule 6(5) substituted for providing that cost audit report shall be submitted
to board within 180 days from closure of FY.
ix.
Rule 6(6) substituted to provide filing of cost audit report in form CRA-4-XBRL
within 30 days of receipt
Section 148 of the
Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules,
2014 (by considering various amendments as mentioned above) are applicable and
governs the maintenance of cost accounting records and cost audit
APPLICABILITY-
Every
company including a foreign company engaged in the production of goods or
providing services specified in the Tables -A & B of rule 3, having an
overall turnover from all its products and services of Rs 35 crores or more
during the immediately preceding financial year shall include cost records for
such products and services in their books of accounts maintained.
RULE-3
The Rule 3 has classified
sectors under Regulated and Non-Regulated sectors.
The
sectors covered under Table A are under the Regulated Sector and sectors
covered under Table B are under the Non-Regulated Sector.
Every
company engaged in the production of the goods or providing services, specified
in Tables (Table A – Regulated sectors and Table B – Non-regulated Sectors),
having an overall turnover from all its products and services of Rupees thirty
five crore or more during the immediately preceding financial year, shall
include cost records for such products or services in their books of account.
Provided
that nothing contained above shall apply to a company which is classified as
micro enterprise or a small enterprise including as per the turnover criteria
under sub-section (9) of section 7 of the Micro, Small and Medium Enterprises
Act, 2006.
RULE-4
Rule 4states that cost audit
would be applicable to a company if the classification of company falls under
Industry / Sector / Product / Service provided in Table A or Table B and:
For
any company to fall under the requirement of Cost Audit following two tests
shall apply:
a. Coverage under Table – A
and / or Table – B.
Company’s
product / services shall fall under one or more categories given under Table A
and / or Table B. AND the respective Central Excise Tariff Act (CETA) headings
(wherever applicable).
b. Turnover:
(i)
If the products or services of the company falls under Table A – Regulated
sectors:
Overall
annual turnover from all products and /or services is Rs. 50 crore or more AND
aggregate turnover from individual product or services for which cost records
are required to be maintained is Rs. 25 crore or more, during the immediately
preceding financial year;
(ii)
If the products or services of the company falls under Table B – Non-regulated
Sectors:Overall annual turnover from all products and / or services is Rs. 100
crore or more AND aggregate turnover from individual product or services for
which cost records are required to be maintained is Rs. 35 crore or more,
during the immediately preceding financial year.
Exemption from applicability
of Cost audit(Rule 7):
The
requirement of 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 75% of its total
revenue; or
ii.
which is operating from a special economic zone.
RULE-5
MAINTAINANCE OF RECORDS
The
requirement to maintain cost records in Form CRA-1 have been postponed to
Financial Year 2015-16 for the following companies in some non-regulated
sectors, namely; Coffee and Tea, Milk Powder and Electricals and electronic
machinery.
Every
company, which comes under the Rules, including all units and branches, shall,
in each financial year from 1-4-2014, maintain cost records in Form CRA-1.
In
the case of company covered in serial number 12 (coffee and tea) and serial
numbers 24 to 32 of item B of Rule 3, the requirement of Rule 5 shall apply in
respect of each of its financial year on or after 2014-2015.
The
above cost records shall be maintained on regular basis so as to help
calculation of per unit cost of production or cost of operations, cost of sales
and margin for each product and activities for every financial year on monthly,
quarterly, half-yearly or annual basis.
The
cost records shall be maintained in such manner as to enable the company to
have control over various operations and costs to achieve optimum economies in
utilization.
RULE-6
Pursuant
to the rules 3 and 4, it is clear which are the companies to whom Cost Audit
shall be applicable in every financial year and therefore there is no need for
the Central Government to issue order directing Cost Audit.
Cost Audit Report-Rule 6(4)
as amended on 31-12-2014
The
Cost Auditor shall submit the Cost Audit Report along with his or its
reservations or qualifications, if any, in Form CRA-3 to the Board of Directors of the company within a
period of 180 days from the closure of the financial year.
The
Board of Directors shall consider and examine such report, particularly any
reservation or qualification contained therein.
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";
Copy of the Cost Audit Report
to be furnished to the Central Government:
Every
Company shall forward a copy of Audit Report to the Registrar of Companies
within 30 days of receipt of the Audit Report along with the full information
and explanation on every qualification or reservation, if any, in Form CRA-4with fees specified in
Companies (Registration Offices and Fees) Rules, 2014.
Duty of the Cost Auditor to
report on commission of offence found during the Audit-Rule 6(7)
In terms of Section 143(12) of the Act, if the
Cost Auditor, in the course of his duties as Cost Auditor, has reason to
believe that an offence involving fraud has been or is being committed against
the Company by its officers or employees, he shall immediately report the
manner to the Central Government.
Content of the Certificate of
cost Auditor:
The
individual or the firm, as the case may be, is eligible for appointment and is
not disqualified for appointment under the Act, the Cost and Works Accountants
Act, 1959 (23 of 1959) and the rules or regulations made thereunder.
The
individual or the firm, as the case may be, satisfies the criteria provided in
section 141 of the Act, so far as may be applicable.
The
proposed appointment is within the limits laid down by or under the authority
of the Act;
The
list of proceedings against the cost auditor or audit firm or any partner of
the audit firm pending with respect to professional matters of conduct, as
disclosed in the certificate, is true and correct.
APPOINTMENT OF COST
AUDITOR-
Who can be appointing as cost
auditor:
A
cost Accountant in practice or a firm of cost accountants can be appointed as a
cost auditor.
A
cost accountant holding certificate of practiced on part time basis is not
entitled to conduct cost audit. Thus, only a cost accountant in whole-time
practice can conduct cost audit.
Who can’t appoint as cost
auditor:
Statutory
Auditor appointed under Section 139 of the Act can’t be appointed as Cost
Auditor of the Company.
Process for appointment of
Cost Auditor:
Consent
of Auditor: Before appointment is made, the written consent of the cost auditor
to such appointment, and a certificate from him or it, as provided in sub-rule
(1A), shall be obtained.
If
Company has Audit Committee: Appointment and remuneration will be recommended
by audit committee and approved by Board.
If
Company doesn’t have Audit Committee: If there is not audit committee, appointment
and remuneration fixation will be done by Board. Later, this remuneration shall
be ratified by Shareholders.
Information for appointment
Cost Auditor:
a.
Information to Cost Auditor: Every Company which requires appointment of Cost
Auditor shall inform the Cost auditor of his appointment within 30 days of
Board Meeting in which resolution for appointment has passed.
b.
Information to ROC: Company will file
form CRA-2 with ROC: Within 30 days of passing of Resolution in Board Meeting,
OR Within 180 days of the commencement of financial year. Whichever is earlier.
Removal of Cost Auditor:
The
cost auditor appointed may be removed from his office before the expiry of his
term, through a board resolution after giving a reasonable opportunity of being
heard to the Cost Auditor and recording the reasons for such removal in
writing.
Appointment of Cost Auditor
in case of Casual Vacancy:
Any
casual vacancy in the office of a cost auditor whether due to resignation,
death or removal, shall be filed by the Board of Directors within 30 days of
such Vacancy.
Company
will file form CRA-2 with ROC within said 30 days. Period by which appointment
to be made-Rule 6(1): The concerned companies shall appoint the Cost Auditor
within 180 days of the commencement of every financial year.
Limit of number of Cost
Auditor:
Limit
of number of audit per person, as are applicable to Statutory Auditors are
applicable to Cost Auditors.
Qualifications, Rights,
Duties and obligations of Cost Auditor:
The
qualification, disqualification, rights, duties and obligations of Cost
Auditor/firm of Cost Auditor are same as applicable to Statutory Auditors.
Note: The auditor
conducting the cost audit shall comply with the cost auditing standards.
Punishment on
contravention of this Section:
To the company:
The
company shall be punishable with a fine which shall not be less than Rs.
250,00.00 but which may extend to Rs. 5,00,000.00. Every officer of the company
who is in default shall be punishable with imprisonment for a term which may
extend to 1 year or fine which shall not be less than Rs. 10,000.00 but which
may extend to Rs. 1,00,000.00 or with both.
To the auditor
He
shall be punishable with a fine which shall not be less than Rs. 25000.00 but
which may extend to Rs. 5,00,000.00. However, if the auditor has contravened
such provisions willfully with the intention to deceive the company or its
shareholders or creditors or tax authorities, he shall be punishable with
imprisonment for a term which may extend to one year and with fine which shall
not be less than Rs. 1,00,000.00 but which may extend to Rs. 25,00,000.00.
In
case the criminal liability of an audit firm, the liability other than fine
shall devolve only on the concerned partner who acted in fraudulent manner.
(A) Regulated Sectors
Sl.
No.
Industry/Sector/Product/Service
Central Excise
Tariff Act(CETA) Heading (wherever applicable)
1.
Telecommunication
services made available to users by means of any transmission or reception of
signs, signals, writing, images and sounds or intelligence of any nature and
regulated by the Telecom Regulatory Authority of India under the Telecom
Regulatory Authority of India Act, 1997 (24 of 1997); including activities
that requires authorization or license issued by the Department of
Telecommunications, Government of India under Indian Telegraph Act, 1885 (13
of 1885);
Not applicable
2.
Generation,
transmission, distribution and supply of electricity regulated by the
relevant regulatory body or authority under the Electricity Act, 2003 (36 of
2003);
Generation- 2716;
Other Activity-Not Applicable
3.
Petroleum
products; including activities regulated by the Petroleum and Natural Gas
Regulatory Board under the Petroleum and Natural Gas Regulatory Board Act,
2006 (19 of 2006)
2709 to 2715;
Other
Activity-Not Applicable
4.
Drugs and
pharmaceuticals
2901 to 2942; 3001
to 3006
5.
Fertilizers
3102 to 3105
6.
Sugar and
industrial alcohol
1701; 1703; 2207
(B) Non-Regulated Sectors
SI. No.
Industry/ Sector/
Product/ Service
Central Excise
Tariff Act Heading (wherever applicable)
1.
Machinery and
mechanical appliances used in defence, space and atomic energy sectors
excluding any ancillary item or items;
Explanation.
– For the purposes of this sub-clause, any company which is engaged in any
item or items supplied exclusively for use under this clause, shall be deemed
to be covered under these rules
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General Terms), you authorize us and we will remit the Settlement
Amount to Your Bank Account on the Payment Date in respect of an
Eligible Transaction. When you either initially provide or later
change Your Bank Account information, the Payment Date will be
deferred for a period of up to 14 calendar days. You will not have
the ability to initiate or cause payments to be made to you. If you
refund money to a customer in connection with one of Your
Transactions in accordance with Section S-2.2, on the next available
Designated Day for SoOLEGAL Site, we will credit you with the amount
to us attributable to the amount of the customer refund, less the
Refund Administration Fee for each refund, which amount we may retain
as an administrative fee.
"Eligible
Transaction"
means Your Transaction against which the actual shipment date has
been confirmed by you.
"Designated
Day" means any particular Day of the week designated by SoOLEGAL
on a weekly basis, in its sole discretion, for making remittances to
you.
"Payment
Date" means the Designated Day falling immediately after 14
calendar days (or less in our sole discretion) of the Eligible
Transaction.
"Settlement
Amount" means Invoices raised through SoOLEGAL Platform (which
you will accept as payment in full for the Transaction and shipping
and handling of Your Documents/ Advices), less: (a) the Referral Fees
due for such sums; (b) any Transacting on SoOLEGAL Subscription Fees
due; (c) taxes required to be charged by us on our fees; (d) any
refunds due to customers in connection with the SoOLEGAL Site; (e)
Reserves, as may be applicable, as per this Transaction Terms &
Conditions; (f) Closing Fees, if applicable; and (g) any other
applicable fee prescribed under the Program Policies. SoOLEGAL shall
not be responsible for
S-6.3. In
the event that we elect not to recover from you a customer's
chargeback, failed payment, or other payment reversal (a "Payment
Failure"), you irrevocably assign to us all your rights, title
and interest in and associated with that Payment Failure.
S-7.
Control of Site
Notwithstanding
any provision of this Transaction Terms & Conditions, we will
have the right in our sole discretion to determine the content,
appearance, design, functionality and all other aspects of the
SoOLEGAL Site and the Transacting on SoOLEGAL Service (including the
right to re-design, modify, remove and alter the content, appearance,
design, functionality, and other aspects of, and prevent or restrict
access to any of the SoOLEGAL Site and the Transacting on SoOLEGAL
Service and any element, aspect, portion or feature thereof
(including any listings), from time to time) and to delay or suspend
listing of, or to refuse to list, or to de-list, or require you not
to list any or all Documents/ Advices on the SoOLEGAL Site in our
sole discretion.
S-8.
Effect of Termination
Upon
termination of this Contract, the Transaction Terms & Conditions
automatiocally stands terminated and in connection with the SoOLEGAL
Site, all rights and obligations of the parties under these Service
Terms with regard to the SoOLEGAL Site will be extinguished, except
that the rights and obligations of the parties with respect to Your
Transactions occurring during the Term will survive the termination
or expiration of the Term.
"SoOLEGAL
Refund Policies" means
the return and refund policies published on the SoOLEGAL Site.
"Required
Documents/ Advices Information"means,
with respect to each of Your Documents/ Advices in connection with
the SoOLEGAL Site, the following (except to the extent expressly not
required under the applicable Policies) categorization within each
SoOLEGAL Documents/ Advices category and browse structure as
prescribed by SoOLEGAL from time to time, Purchase Price; Documents/
Advice Usage, any text, disclaimers, warnings, notices, labels or
other content required by applicable Law to be displayed in
connection with the offer, merchandising, advertising or Transaction
of Your Documents/ Advices, requirements, fees or other terms and
conditions applicable to such Documents/ Advices that a customer
should be aware of prior to purchasing the Documents/ Advices;
"Transacting
on SoOLEGAL Launch Date"means
the date on which we first list one of Your Documents/ Advices for
Transaction on the SoOLEGAL Site.
"URL
Marks" means
any Trademark, or any other logo, name, phrase, identifier or
character string, that contains or incorporates any top level domain
(e.g., .com, co.in, co.uk, .in, .de, .es, .edu, .fr, .jp) or any
variation thereof (e.g., dot com, dotcom, net, or com).
"Your
Transaction"is
defined in the Transaction Terms & Conditions; however, as used
in Terms & Conditions, it shall mean any and all such
transactions whereby you conduct Transacting of Documents/ Advices or
advice sought from you by clients/ customers in writing or by any
other mode which is in coherence with SoOLEGAL policy on SoOLEGAL
site only.
Taxes
on Fees Payable to SoOLEGAL.In
regard to these Service Terms you can provide a PAN registration
number or any other Registration/ Enrolment number that reflects your
Professional capacity by virtue of various enactments in place. If
you are PAN registered, or any professional Firm but not PAN
registered, you give the following warranties and representations:
(a)
all services provided by SoOLEGAL to you are being received by your
establishment under your designated PAN registration number; and
SoOLEGAL
reserves the right to request additional information and to confirm
the validity of any your account information (including without
limitation your PAN registration number) from you or government
authorities and agencies as permitted by Law and you hereby
irrevocably authorize SoOLEGAL to request and obtain such information
from such government authorities and agencies. Further, you agree to
provide any such information to SoOLEGAL upon request. SoOLEGAL
reserves the right to charge you any applicable unbilled PAN if you
provide a PAN registration number, or evidence of being in a
Professional Firm, that is determined to be invalid. PAN registered
REGISTERED USERs and REGISTERED USERs who provide evidence of being
in Law Firm agree to accept electronic PAN invoices in a format and
method of delivery as determined by SoOLEGAL.
All
payments by SoOLEGAL to you shall be made subject to any applicable
withholding taxes under the applicable Law. SoOLEGAL will retain, in
addition to its net Fees, an amount equal to the legally applicable
withholding taxes at the applicable rate. You are responsible for
deducting and depositing the legally applicable taxes and deliver to
SoOLEGAL sufficient Documents/ Advice evidencing the deposit of tax.
Upon receipt of the evidence of deduction of tax, SoOLEGAL will remit
the amount evidenced in the certificate to you. Upon your failure to
duly deposit these taxes and providing evidence to that effect within
5 days from the end of the relevant month, SoOLEGAL shall have the
right to utilize the retained amount for discharging its tax
liability.
Where
you have deposited the taxes, you will issue an appropriate tax
withholding certificate for such amount to SoOLEGAL and SoOLEGAL
shall provide necessary support and Documents/ Adviceation as may be
required by you for discharging your obligations.
SoOLEGAL
has the option to obtain an order for lower or NIL withholding tax
from the Indian Revenue authorities. In case SoOLEGAL successfully
procures such an order, it will communicate the same to you. In that
case, the amounts retained, shall be in accordance with the
directions contained in the order as in force at the point in time
when tax is required to be deducted at source.
Any
taxes applicable in addition to the fee payable to SoOLEGAL shall be
added to the invoiced amount as per applicable Law at the invoicing
date which shall be paid by you.F.11.
Indemnity
Category
and Documents/ Advice Restrictions
Certain
Documents/ Advices cannot be listed or sold on SoOLEGAL site as a
matter of compliance with legal or regulatory restrictions (for
example, prescription drugs) or in accordance with SoOLEGAL
policy (for example, crime scene photos).
SoOLEGAL's
policies also prohibit specific types of Documents/ Advice
content. For guidelines on prohibited content and copyright
violations, see our Prohibited
Content list.
For
some Documents/ Advice categories, REGISTERED USERS may not create
Documents/ Advice listings without prior approval from SoOLEGAL.
In
addition to your obligations under Section
6 of
the Transaction Terms & Conditions, you also agree to indemnify,
defend and hold harmless us, our Affiliates and their and our
respective officers, directors, employees, representatives and agents
against any Claim that arises out of or relates to: (a) the Units
(whether or not title has transferred to us, and including any Unit
that we identify as yours pursuant to Section
F-4 regardless
of whether such Unit is the actual item you originally sent to us),
including any personal injury, death or property damage; and b) any
of Your Taxes or the collection, payment or failure to collect or pay
Your Taxes.
Registered
Users must at all times adhere to the following rules for the
Documents/ Advices they intend to put on Transaction:
The
"Add a Documents/ Advice" feature allows REGISTERED USERS
to create Documents/ Advice details pages for Documents/ Advices.
The
following rules and restrictions apply to REGISTERED USERS who use
the SoOLEGAL.in "Add a Documents/ Advice" feature.
Using
this feature for any purpose other than creating Documents/ Advice
details pages is prohibited.
Any
Documents/ Advice already in the SoOLEGAL.in catalogue which is not
novel and/ or unique or has already been provided by any other
Registered User which may give rise to Intellectual Property
infringement of any other Registered User is prohibited.
Detail
pages may not feature or contain Prohibited
Contentor.
The
inclusion of any of the following information in detail page titles,
descriptions, bullet points, or images is prohibited:
Information
which is grossly harmful, harassing, blasphemous, defamatory,
pedophilic, libelous, invasive of another's privacy, hateful, or
racially, ethnically objectionable, disparaging, relating or
encouraging money laundering or gambling, pornographic, obscene or
offensive content or otherwise unlawful in any manner whatever.
Availability,
price, condition, alternative ordering information (such as links to
other websites for placing orders).
Reviews,
quotes or testimonials.
Solicitations
for positive customer reviews.
Advertisements,
promotional material, or watermarks on images, photos or videos.
Time-sensitive
information
Information
which belongs to another person and to which the REGISTERED USER
does not have any right to.
Information
which infringes any patent, trademark, copyright or other
proprietary rights.
Information
which deceives or misleads the addressee about the origin of the
messages or communicates any information which is grossly offensive
or menacing in nature.
Information
which threatens the unity, integrity, defence, security or
sovereignty of India, friendly relations with foreign states, or
public order or causes incitement to the commission of any
cognizable offence or prevents investigation of any offence or is
insulting any other nation.
Information
containing software viruses or any other computer code, files or
programs designed to interrupt, destroy or limit the functionality
of any computer resource.
Information
violating any law for the time being in force.
All
Documents/ Advices should be appropriately and accurately classified
to the most specific location available. Incorrectly classifying
Documents/ Advices is prohibited.
Documents/
Advice titles, Documents/ Advice descriptions, and bullets must be
clearly written and should assist the customer in understanding the
Documents/ Advice. .
All
Documents/ Advice images must meet SoOLEGAL general standards as
well as any applicable category-specific image guidelines.
Using
bad data (HTML, special characters */? etc.) in titles,
descriptions, bullets and for any other attribute is prohibited.
Do
not include HTML, DHTML, Java, scripts or other types of executables
in your detail pages.
Prohibited
REGISTERED USER Activities and Actions
SoOLEGAL.com
REGISTERED USER Rules are established to maintain a transacting
platform that is safe for buyers and fair for REGISTERED USERS.
Failure to comply with the terms of the REGISTERED USER Rules can
result in cancellation of listings, suspension from use of
SoOLEGAL.in tools and reports, or the removal of transacting
privileges.
Attempts
to divert transactions or buyers:Any
attempt to circumvent the established SoOLEGAL Transactions process
or to divert SoOLEGAL users to another website or Transactions
processis
prohibited. Specifically, any advertisements, marketing messages
(special offers) or "calls to action" that lead, prompt,
or encourage SoOLEGALusers to leave the SoOLEGAL websiteare
prohibited.Prohibited
activities include the following:
The
use of e-mail intended to divert customers away from the
SoOLEGAL.com Transactions process.
Unauthorised
& improper "Names":A
REGISTERED USER's Name (identifying the REGISTERED USER's entity on
SoOLEGAL.com)mustbe
a name that: accurately identifies the REGISTERED USER; is not
misleading: and the REGISTERED USER has the right to use (that is,
the name cannot include the trademark of, or otherwise infringe on,
any trademark or other intellectual property right of any person).
Furthermore, a REGISTERED USERcannotuse
a name that contains an e-mail suffix such as .com, .net, .biz, and
so on.
Unauthorised
& improper invoicing:REGISTERED
USERS must ensure that the tax invoice is raised in the name of the
end customer who has placed an order with them through SoOLEGAL
Payment Systems platform . The tax invoice should not mention
SoOLEGAL as either a REGISTERED USER or a customer/buyer. Please
note that all Documents/ Advices listed on SoOLEGAL.com are sold by
the respective REGISTERED USERS to the end customers and SoOLEGAL is
neither a buyer nor a REGISTERED USER in the transaction. REGISTERED
USERS need to include the PAN/ Service Tax registration number in
the invoice.
Inappropriate
e-mail communications:All
REGISTERED USER e-mail communications with buyers must be courteous,
relevant and appropriate. Unsolicited e-mail communications with
SoOLEGAL , e-mail communications other than as necessary and related
customer service, and e-mails containing marketing communications of
any kind (including within otherwise permitted communications)are
prohibited.
Operating
multiple REGISTERED USER accounts:Operating
and maintaining multiple REGISTERED USER accounts is prohibited.
In
your request, please provide an explanation of the legitimate
business need for a second account.
Misuse
of Search and Browse:When
customers use SoOLEGAL's search engine and browse structure, they
expect to find relevant and accurate results. To protect the
customer experience, all Documents/ Advice-related information,
including keywords and search terms, must comply with the guidelines
provided under. Any attempt to manipulate the search and
browse experience is prohibited.
Misuse
of the ratings, feedback or Documents/ Advice reviews:REGISTERED
USERS cannot submit abusive or inappropriate feedback entries,
coerce or threaten buyers into submitting feedback, submit
transaction feedback regarding them, or include personal information
about a transaction partner within a feedback entry. Furthermore,
any attempt to manipulate ratings of any REGISTERED USER is
prohibited. Any attempt to manipulate ratings, feedback, or
Documents/ Advice reviews is prohibited.
Reviews:Reviews
are important to the SoOLEGAL Platform, providing a forum for
feedback about Documents/ Advice and service details and reviewers'
experiences with Documents/ Advices and services –
positive
or negative. You may not write reviews for Documents/ Advices or
services that you have a financial interest in, including reviews
for Documents/ Advices or services that you or your competitors deal
with. Additionally, you may not provide compensation for a review
(including free or discounted Documents/ Advices). Review
solicitations that ask for only positive reviews or that offer
compensation are prohibited. You may not ask buyers to modify or
remove reviews.
Prohibited
Content
REGISTERED
USERS are expected to conduct proper research to ensure that the
items posted to our website are in compliance with all applicable
laws. If we determine that the content of a Documents/ Advice detail
page or listing is prohibited, potentially illegal, or inappropriate,
we may remove or alter it without prior notice. SoOLEGAL reserves the
right to make judgments about whether or not content is appropriate.
The
following list of prohibited Documents/ Advices comprises two
sections: Prohibited Content and Intellectual Property
Violations.
Listing
prohibited content may result in the cancellation of your listings,
or the suspension or removal of your transacting privileges.
REGISTERED USERS are responsible for ensuring that the Documents/
Advices they offer are legal and authorised for Transaction or
re-Transaction.
If
we determine that the content of a Documents/ Advice detail page or
listing is prohibited, potentially illegal, or inappropriate, we may
remove or alter it without prior notice. SoOLEGAL reserves the right
to make judgments about whether or not content is appropriate.
Illegal
and potentially illegal Documents/ Advices: Documents/ Advices sold
on SoOLEGAL.in must adhere to all applicable laws. As REGISTERED
USERS are legally liable for their actions and transactions, they
must know the legal parameters surrounding any Documents/ Advice
they display on our website.
Offensive
material: SoOLEGAL reserves the right to determine the
appropriateness of listings posted to our website.
Nudity:
In general, images that portray nudity in a gratuitous or graphic
mannerare
prohibited.
Items
that infringe upon an individual's privacy. SoOLEGAL holds personal
privacy in the highest regard. Therefore, items that infringe upon,
or have potential to infringe upon, an individual's privacy are
prohibited.
Intellectual
Property Violations
Counterfeit
merchandise:Documents/
Advices displayed on our website must be authentic. Any Documents/
Advice that has been illegally replicated, reproduced or
manufactured is prohibited.
Books-
Unauthorised copies of books are prohibited.
Movies-
Unauthorised copies of movies in any format are prohibited.
Unreleased/prereleased movies, screeners, trailers, unpublished and
unauthorized film scripts (no ISBN number), electronic press kits,
and unauthorised props are also prohibited.
Photos-
Unauthorised copies of photos are prohibited.
Television
Programs-
Unauthorised copies of television Programs (including pay-per-view
events), Programs never broadcast, unauthorised scripts,
unauthorised props, and screeners are prohibited.
Transferred
media. Media transferred from one format to another is prohibited.
This includes but is not limited to: films converted from NTSC to
Pal and Pal to NTSC, laserdisc to video, television to video, CD-ROM
to cassette tape, from the Internet to any digital format, etc.
Promotional
media:Promotional
versions of media Documents/ Advices, including books (advance
reading copies and uncorrected proofs), music, and videos
(screeners)are
prohibited. These Documents/ Advices are distributed for promotional
consideration and generally are not authorized for Transaction.
Rights
of Publicity:Celebrity
images and/or the use of celebrity names cannot be used for
commercial purposes without permission of a celebrity or their
management. This includes Documents/ Advice endorsements and use of
a celebrity's likeness on merchandise such as posters, mouse pads,
clocks, image collections in digital format, and so on.
YOU
HAVE AGREED TO THIS TRANSACTION TERMS BY CLICKING THE AGREE BUTTON
COST AUDIT
Section 148 of the Companies act 2013 provides the provision of Cost Audit and The Central Government issued Companies (Cost Records and Audit) Rules, 2014 on June 30, 2014.
Government needs authentic and reliable data of cost for various purposes like price fixation of controlled commodities. The information is also useful in various decisions like fixation of duty drawback, export incentives; amount of excise duty the product can bear, deciding whether special incentives are required to a particular industry etc.
There are certain and rules have been provided for regulation and working of Cos Audit.
Subsequently, various amendments are carried out in the above rules as enumerated below from time to time till date:
The Companies (Cost Records and Audit) Amendment Rules, 2014 dated 31/12/2014
This amendment brought the changes as pointed below:
i. Definition of Central excise tariff heading given
ii. Rule 3 – Application of cost records substituted – Table A and Table B added
iii. Rule 4 – Applicability of cost audit substituted – Table A and Table referred
iv. Proviso to Rule 5(1) inserted.
v. Rule 6(3A) inserted – to give the provision to fill the casual vacancy within 30 days.
vi. Rule 7 (Rules not to apply in certain cases) omitted
vii. Form CRA-1 and CRA 3 substituted
2. The Companies (cost records and audit) (Amendment) Rules, 2015 dated 12/06/2015
This amendment brought the changes as pointed below:
i. Amendment in CRA-2 & CRA-4
3. The Companies (cost records and audit) (Amendment) Rules, 2015 dated 14/12/2015
This amendment brought the changes as pointed below:
i. Rule 13 of The Companies (Cost Records and Audit) Rules, 2014 was substituted with new clause
4. The Companies (cost records and audit) (Amendment) Rules, 2016 dated 14.07.2016
This amendment brought the changes as pointed below:
i. Definition of cost audit Report is substituted with the new one
ii. Table A and Table B given under Rule 3 are substituted.
iii. Rule 4(3)(iii) is inserted to include captive generation plant.
iv. proviso to Rule 6 (1) written consent of the cost auditor is required to be obtained.
v. Rule 6(1A) inserted to include certificate from cost auditor in terms of section 141
vi. Proviso to Rule 6 (3) inserted for removal of cost auditor before expiry of term.
vii. Rule 6(3B) inserted to include approval of Board of directors for the cost statements and annexures of cost audit report before signed on behalf of board.
viii. Rule 6(5) substituted for providing that cost audit report shall be submitted to board within 180 days from closure of FY.
ix. Rule 6(6) substituted to provide filing of cost audit report in form CRA-4-XBRL within 30 days of receipt
Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (by considering various amendments as mentioned above) are applicable and governs the maintenance of cost accounting records and cost audit
APPLICABILITY-
Every company including a foreign company engaged in the production of goods or providing services specified in the Tables -A & B of rule 3, having an overall turnover from all its products and services of Rs 35 crores or more during the immediately preceding financial year shall include cost records for such products and services in their books of accounts maintained.
RULE-3
The Rule 3 has classified sectors under Regulated and Non-Regulated sectors.
The sectors covered under Table A are under the Regulated Sector and sectors covered under Table B are under the Non-Regulated Sector.
Every company engaged in the production of the goods or providing services, specified in Tables (Table A – Regulated sectors and Table B – Non-regulated Sectors), having an overall turnover from all its products and services of Rupees thirty five crore or more during the immediately preceding financial year, shall include cost records for such products or services in their books of account.
Provided that nothing contained above shall apply to a company which is classified as micro enterprise or a small enterprise including as per the turnover criteria under sub-section (9) of section 7 of the Micro, Small and Medium Enterprises Act, 2006.
RULE-4
Rule 4states that cost audit would be applicable to a company if the classification of company falls under Industry / Sector / Product / Service provided in Table A or Table B and:
For any company to fall under the requirement of Cost Audit following two tests shall apply:
a. Coverage under Table – A and / or Table – B.
Company’s product / services shall fall under one or more categories given under Table A and / or Table B. AND the respective Central Excise Tariff Act (CETA) headings (wherever applicable).
b. Turnover:
(i) If the products or services of the company falls under Table A – Regulated sectors:
Overall annual turnover from all products and /or services is Rs. 50 crore or more AND aggregate turnover from individual product or services for which cost records are required to be maintained is Rs. 25 crore or more, during the immediately preceding financial year;
(ii) If the products or services of the company falls under Table B – Non-regulated Sectors:Overall annual turnover from all products and / or services is Rs. 100 crore or more AND aggregate turnover from individual product or services for which cost records are required to be maintained is Rs. 35 crore or more, during the immediately preceding financial year.
Exemption from applicability of Cost audit(Rule 7):
The requirement of 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 75% of its total revenue; or
ii. which is operating from a special economic zone.
RULE-5
MAINTAINANCE OF RECORDS
The requirement to maintain cost records in Form CRA-1 have been postponed to Financial Year 2015-16 for the following companies in some non-regulated sectors, namely; Coffee and Tea, Milk Powder and Electricals and electronic machinery.
Every company, which comes under the Rules, including all units and branches, shall, in each financial year from 1-4-2014, maintain cost records in Form CRA-1.
In the case of company covered in serial number 12 (coffee and tea) and serial numbers 24 to 32 of item B of Rule 3, the requirement of Rule 5 shall apply in respect of each of its financial year on or after 2014-2015.
The above cost records shall be maintained on regular basis so as to help calculation of per unit cost of production or cost of operations, cost of sales and margin for each product and activities for every financial year on monthly, quarterly, half-yearly or annual basis.
The cost records shall be maintained in such manner as to enable the company to have control over various operations and costs to achieve optimum economies in utilization.
RULE-6
Pursuant to the rules 3 and 4, it is clear which are the companies to whom Cost Audit shall be applicable in every financial year and therefore there is no need for the Central Government to issue order directing Cost Audit.
Cost Audit Report-Rule 6(4) as amended on 31-12-2014
The Cost Auditor shall submit the Cost Audit Report along with his or its reservations or qualifications, if any, in Form CRA-3 to the Board of Directors of the company within a period of 180 days from the closure of the financial year.
The Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.
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";
Copy of the Cost Audit Report to be furnished to the Central Government:
Every Company shall forward a copy of Audit Report to the Registrar of Companies within 30 days of receipt of the Audit Report along with the full information and explanation on every qualification or reservation, if any, in Form CRA-4 with fees specified in Companies (Registration Offices and Fees) Rules, 2014.
Duty of the Cost Auditor to report on commission of offence found during the Audit-Rule 6(7)
In terms of Section 143(12) of the Act, if the Cost Auditor, in the course of his duties as Cost Auditor, has reason to believe that an offence involving fraud has been or is being committed against the Company by its officers or employees, he shall immediately report the manner to the Central Government.
Content of the Certificate of cost Auditor:
The individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Cost and Works Accountants Act, 1959 (23 of 1959) and the rules or regulations made thereunder.
The individual or the firm, as the case may be, satisfies the criteria provided in section 141 of the Act, so far as may be applicable.
The proposed appointment is within the limits laid down by or under the authority of the Act;
The list of proceedings against the cost auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.
APPOINTMENT OF COST AUDITOR-
Who can be appointing as cost auditor:
A cost Accountant in practice or a firm of cost accountants can be appointed as a cost auditor.
A cost accountant holding certificate of practiced on part time basis is not entitled to conduct cost audit. Thus, only a cost accountant in whole-time practice can conduct cost audit.
Who can’t appoint as cost auditor:
Statutory Auditor appointed under Section 139 of the Act can’t be appointed as Cost Auditor of the Company.
Process for appointment of Cost Auditor:
Consent of Auditor: Before appointment is made, the written consent of the cost auditor to such appointment, and a certificate from him or it, as provided in sub-rule (1A), shall be obtained.
If Company has Audit Committee: Appointment and remuneration will be recommended by audit committee and approved by Board.
If Company doesn’t have Audit Committee: If there is not audit committee, appointment and remuneration fixation will be done by Board. Later, this remuneration shall be ratified by Shareholders.
Information for appointment Cost Auditor:
a. Information to Cost Auditor: Every Company which requires appointment of Cost Auditor shall inform the Cost auditor of his appointment within 30 days of Board Meeting in which resolution for appointment has passed.
b. Information to ROC: Company will file form CRA-2 with ROC: Within 30 days of passing of Resolution in Board Meeting, OR Within 180 days of the commencement of financial year. Whichever is earlier.
Removal of Cost Auditor:
The cost auditor appointed may be removed from his office before the expiry of his term, through a board resolution after giving a reasonable opportunity of being heard to the Cost Auditor and recording the reasons for such removal in writing.
Appointment of Cost Auditor in case of Casual Vacancy:
Any casual vacancy in the office of a cost auditor whether due to resignation, death or removal, shall be filed by the Board of Directors within 30 days of such Vacancy.
Company will file form CRA-2 with ROC within said 30 days. Period by which appointment to be made-Rule 6(1): The concerned companies shall appoint the Cost Auditor within 180 days of the commencement of every financial year.
Limit of number of Cost Auditor:
Limit of number of audit per person, as are applicable to Statutory Auditors are applicable to Cost Auditors.
Qualifications, Rights, Duties and obligations of Cost Auditor:
The qualification, disqualification, rights, duties and obligations of Cost Auditor/firm of Cost Auditor are same as applicable to Statutory Auditors.
Note: The auditor conducting the cost audit shall comply with the cost auditing standards.
Punishment on contravention of this Section:
To the company:
The company shall be punishable with a fine which shall not be less than Rs. 250,00.00 but which may extend to Rs. 5,00,000.00. Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 1 year or fine which shall not be less than Rs. 10,000.00 but which may extend to Rs. 1,00,000.00 or with both.
To the auditor
He shall be punishable with a fine which shall not be less than Rs. 25000.00 but which may extend to Rs. 5,00,000.00. However, if the auditor has contravened such provisions willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than Rs. 1,00,000.00 but which may extend to Rs. 25,00,000.00.
In case the criminal liability of an audit firm, the liability other than fine shall devolve only on the concerned partner who acted in fraudulent manner.
(A) Regulated Sectors
Sl. No.
Industry/Sector/Product/Service
Central Excise Tariff Act(CETA) Heading (wherever applicable)
1.
Telecommunication services made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature and regulated by the Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997); including activities that requires authorization or license issued by the Department of Telecommunications, Government of India under Indian Telegraph Act, 1885 (13 of 1885);
Not applicable
2.
Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 (36 of 2003);
Generation- 2716; Other Activity-Not Applicable
3.
Petroleum products; including activities regulated by the Petroleum and Natural Gas Regulatory Board under the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006)
2709 to 2715;
Other Activity-Not Applicable
4.
Drugs and pharmaceuticals
2901 to 2942; 3001 to 3006
5.
Fertilizers
3102 to 3105
6.
Sugar and industrial alcohol
1701; 1703; 2207
(B) Non-Regulated Sectors
SI. No.
Industry/ Sector/ Product/ Service
Central Excise Tariff Act Heading (wherever applicable)
1.
Machinery and mechanical appliances used in defence, space and atomic energy sectors excluding any ancillary item or items;
Explanation. – For the purposes of this sub-clause, any company which is engaged in any item or items supplied exclusively for use under this clause, shall be deemed to be covered under these rules
8401; 8801 to 8805; 8901 to 8908
2.
Turbo jets and turbo propellers;
8411
3.
Bengaluru, India
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Pune, India
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Delhi, India
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New Delhi, India
New Delhi, India
Srinagar, India
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