Friday, 4 January 2013

Compliance Report -Main Points


 PRACTICAL ASPECTS RELATING TO COMPLIANCE CERTIFICATION UNDER COMPANIES (COST ACCOUNTING RECORDS) RULES , 2011

1.       Introduction
The Central Government has mandated filing the Compliance Report with the Central Government by the companies meeting the threshold limits as per the below mentioned notifications and are not in exempted categories as indicated in General Circular No. 67/2011 dated 30th November 2011 issued by the Ministry of Corporate Affairs read with MCA vide aforesaid letter No F. No. 52/1/CAB‐2012 dated 25th May 2012.

1 GSR 429(E) dated 3rd June, 2011 issued Companies (Cost Accounting Records) Rules, 2011
 ( Common CARR)
2 Industry specific Cost Accounting Records Rules 2011 for six industries issued on 7th December 2011  (IS CARR)
(a)   GSR 869(E) – Cost Accounting Records (Telecommunication Industry) Rules, 2011,
(b)   GSR 870(E)- Cost Accounting Records (Petroleum Industry) Rules 2011,
(c)    GSR 871(E)- Cost Accounting Records (Electricity Industry) Rules 2011,
(d)   GSR 872(E)- Cost Accounting Records (Sugar Industry) Rules 2011,
(e)    GSR 873(E)- Cost Accounting Records (Fertilizer Industry) Rules 2011
(f)     GSR 874(E)- Cost Accounting Records (Pharmaceutical Industry) Rules 2011,

2. Applicability
(a) Common- CARR

As per Rule 3 of the Common CARR, the rules shall apply to every company, including a foreign company as defined under section 591 of the Act, which is engaged in the production, processing, manufacturing, or mining activities and wherein any one or more of the conditions given hereinafter are met. The Common CARR are not applicable to the activities or products covered in the IS-CARR.

(b) IS-CARR

As per Rule 3 of the respective IS- CARR, the rules shall apply to every company, including a foreign company as defined under section 591 of the Act, which is engaged in the production, processing, manufacturing, or activities as mentioned in the respective CARR (e.g. Telecommunication, Petroleum, Electricity, Sugar, Fertilizer and Pharmaceutical) and wherein any one or more of the conditions given hereinafter are met.

The Conditions as prescribed in Common- CARR and IS-CARR are as follows:

1.       the aggregate value of net worth as on the last date of the immediately preceding financial year exceeds five 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 twenty 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.

The above conditions are mutually exclusive and a company meeting with any of the condition shall be covered under the respective cost accounting records rules.

The Common- CARR or IS-CARR shall not apply to a body corporate governed by any special Act. Further, Common CARR are not applicable on the companies/ industries covered under the IS-CARR.

3        Compliance Report
As per Rule 2 of respective CARR defines “Compliance Report” means Compliance Report duly authenticated and signed by a cost accountant in the prescribed form of compliance report.

3.1 Filing of Compliance Report
(a) Common- CARR

As per Rule 5 of the Companies (Cost Accounting Records) Rules 2011, every company to which these rules apply shall submit a compliance report, in respect of each of its financial year commencing on or after the 1st day of April, 2011, duly certified by a cost accountant, along with the Annexure to the Central Government, in the prescribed form.
(b) IS-CARR

As per Rule 5 of respective Industry Specific Cost Accounting Records Rules 2011, every company to which these rules apply shall submit a compliance report, in respect of each of its financial year commencing on or after the date of this notification (i.e. 7th December 2011 onwards), duly certified by a Cost Accountant, along with the Annexure to the Central Government, in the specified form.

3.2   Exemption from Filing Compliance Report

3.2.1          MCA vide General Circular No. 67/2011 dated 30th November 2011, clarified that the Companies (Cost Accounting Records) Rules, 2011 are not applicable to:

(i) Wholesale or retail trading activities.
(ii) Banking, financial, leasing, investment, insurance, education, healthcare, tourism, travel, hospitality, recreation, transport services, business/professional consultancy, IT & IT enabled services, research & development, postal/courier services, etc. unless any of these have been specifically covered under any other Cost Accounting Records Rules.
(iii) Companies engaged in rendering job work operations or contracting/ sub-contracting activities, and are paid only the job work or conversion charges, such as tailoring, baking, repairing, painting, printing, constructing, servicing, etc.
(iv) Companies engaged in the production, processing, manufacturing or mining activities till such time they commences their commercial operations.
(v) Ancillary products/activities of companies incidental to their main operations (i.e. products/activities that do not constitute their main line of business) and wherein the total turnover from the sale of each such ancillary products/activities do not exceed 2% of the total turnover of the company or Rs.20 crores, whichever is lower. However, required details of all such ancillary products/activities may be maintained under a miscellaneous group and disclosed appropriately.

3.2.2          Ministry of Corporate Affairs vide letter no. F. No. 52/1/CAB-2012 dated 25th May 20112 clarified that there is no exemption from filing of Compliance Report by the Construction Industry and mentioned the following:

a) All companies engaged in the construction and/or development (real estate) businesses who meet with the threshold limits laid down in Rule 3 of the Companies (Cost Accounting Records) Rules, 2011 shall be required to maintain cost accounting records and file compliance report with the Central Government in accordance with the provisions of these Rules. This includes companies undertaking construction jobs with the use of own materials [whether self-manufactured/produced or procured from outside] and/or development of residential, commercial or industrial estates i.e. development of township, residential units, commercial complex, office blocks, industrial parks [including SEZ], etc. or construction of highways, rails, roads, bridges, industrial & non-industrial structures, or other infrastructure facilities etc. or construction activities undertaken under BOT/BOOT mode, or the projects undertaken as EPC contractor or the projects undertaken abroad by a company incorporated in India.
b) As per MCA’s General Circular No. 67/2011 dated 30th November 2011, companies engaged in construction business as contractors or sub-contractors wherein they are paid only the conversion charges are exempted from the applicability of Companies (Cost Accounting Records) Rules, 2011.
c) Companies (Cost Accounting Records) Rules, 2011 do not apply to such Joint Ventures that are non-corporate entities [i.e. not companies registered under the Companies Act] or to unlisted companies that are below the specified threshold limits or to a body corporate governed by any special Act.

d) As on date, no cost audit is applicable on the companies engaged in the construction and/or development (real estate) business. Hence, these companies are only required to maintain cost accounting records and file compliance report with the Central Government that can be signed by their employee cost accountant as defined in Rule 2(c) of the Companies (Cost Accounting Records) Rules, 2011.


e) MCA vide aforesaid letter No F. No. 52/1/CAB‐2012 dated 25th May 2012 also clarified that Joint Ventures that are non‐corporate entities [i.e. not companies registered under the Companies Act] or to unlisted companies that are below the specified threshold limits or to a body corporate governed by any special Act are not required to file the compliance report.

3.2.4 MCA General Circular No. 12/2012 dated 4th June 2012 further clarified that in case of companies engaged in production, processing, manufacturing or mining of multiple products/activities, if any of their products/activities are not covered under the industry specific Cost Accounting Records Rules, but are covered under the Companies (Cost Accounting Records) Rules, 2011 notified vide GSR 429(E) dated June 3, 2011 and wherein such products/activities are not covered under cost audit vide cost audit orders dated June 30, 2011 and January 24, 2012; such companies shall be required to file compliance report with the Central Government in accordance with the clarifications given vide para (a) of the MCA’s General Circular No. 68/2011 dated 30th November, 2011.

Provisions as per Para (a) of the MCA’s General Circular No. 68/2011 dated 30th November, 2011 are as follows:

“That the companies covered under Companies (Cost Accounting Records) Rules, 2011 shall only file a simple compliance report as per the notified Form-B (copy enclosed) and no other details of cost records are required to be filed with the Government. If all the products/activities of a company, excluding the exempted categories, are covered under cost audit, then the company will not be required to separately file the compliance report.”

if one or more product(s)/activity(s) of a company is covered under Cost Audit and there are other products covered under Common-CARR or any of the IS-CARR but not covered under Cost Audit as per industry specific Cost Audit Orders dated 2nd May, 2011, 30th June, 2011 or 24th January 2012, the Company will be required to file a Compliance Report for the Company as a whole covering products under cost audit and products not under cost audit.

Further, if one or more product(s)/activity(s) of a company is covered under Cost Audit and there are other products not covered under either Common-CARR or any of the IS-CARRs, then the company will not be required to file a Compliance Report since the product(s)/activity(s) other than product(s)/ activity(s) under Cost Audit are in the exempted category.


3.3   Form of Compliance Report

As per Rule 5 of the Common- CARR and IS-CARR, the Compliance Report is to be filed in the prescribed/ specified Form. The Compliance Report consists of (a) the e-Form to be filed by the Company; and (b) Compliance Report and its Annexure:

(a) Form A for filing Compliance Report and other documents with the Central Government consists of Part I providing General Information of the Company and Part II consists of the attachments and digital signatures on behalf of the Company.
(b) Form B is the Compliance Report and Annexure to the Compliance Report.

However, Ministry of Corporate Affairs, vide General Circular No. 8 dated 10th May 2012 has mandated filing of Compliance Reports (Form-A) for the year 2011-12 onwards by using the XBRL taxonomy.

3.4 Time Limit for Submission of Compliance Report

Every company to which respective cost accounting records rules apply is required to submit the compliance report, to the Central Government within a period of one hundred and eighty days from the close of the company’s financial year to which the compliance report relates.

Time Limit for the FY 2011-2012 : 31st January 2013

In case financial accounts are not ready or are yet to be adopted in the AGM, the same was clarified by the Cost Audit Branch earlier that the cost auditor can submit the report based on provisional accounts and submit a supplementary report of reconciliation in case there are materials differences in the final adopted accounts.

3.5 Authentication and Certification of Compliance Report:

The Annexure to the compliance report is required to be approved by the Board of Directors and certified by a Cost Accountant before submitting the same to the Central Government by a company.

As per the respective Cost Accounting Records Rules, 2011 only Cost Accountant or Firm of Cost Accountants is eligible to authenticate and issue the Compliance Report. The term "cost accountant" as defined in the Rules means a cost accountants defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who is either a permanent employee of the company or holds a valid certificate of practice under subsection (1) of section 6 and who is deemed to be in practice under subsection (2) of section 2 of that Act and includes a firm of cost accountants.

As clarified by the Institute of the Cost Accountants of India through Frequently Asked Questions that employee-cost accountant shall be eligible to authenticate the Compliance Report of that Company only where he is working as permanent employee and shall not be eligible to authenticate Compliance Report of any other company even under the same group.

3.6 Mode and Period of Appointment of Cost Accountant

The Rules have not prescribed the procedure for appointment of cost accountant in practice to authenticate the Compliance Report. In case a company desires to have its Compliance Report certified by a Practicing Cost Accountant, it is advisable to appoint the cost accountant in practice by the Board of Directors since the Board has been made responsible to approve the Annexure to Compliance Report before the same is submitted to the Central Government. In case a company decides to get it certified by a permanent employee of the organisation, nominating/authorizing the employee cost accountant would be an internal matter of the company.

3.7 Maintenance of Cost Accounting Records

The Compliance Report should be prepared based on Cost Accounting Records maintained by the Company including its units and branches, in respect of each of its financial year. These cost records are required to be kept on regular basis in such manner so as to make it possible to calculate per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities carried out at individual production units or locations for every financial year on monthly/quarterly/half-yearly/annual basis.

Rule 4(3) of the respective cost accounting records rules stipulates that the cost accounting records should be maintained in accordance with the Generally Accepted Cost Accounting Principles (GACAP) and Cost Accounting Standards (CAS) issued by the Institute of Cost Accountants of India to the extent these are found relevant and applicable.

The cost records including statistical, quantitative and other records which enable the company to exercise, as far as possible, control over the various operations and costs with a view to achieve optimum economies in utilization of resources are required to be maintained. Cost records are required to be maintained on continuous basis from the basic stage of inputs to the final output. These rules also require that the records should be maintained in such a manner so that they are able to provide necessary data which is required to be furnished under these rules.

The rules also require that all such cost records and cost statements, maintained under these rules shall be reconciled with the audited financial statements for the relevant financial year specifically indicating expenses or incomes not considered in the cost records or statements so as to ensure accuracy and to reconcile the costing profit of all its products/activities with the overall profit of the company. The cost accountant is required to clearly indicate and explain any variation, if any, in his compliance report or cost audit report as the case may be.

3.8 Filing of Compliance Report in XBRL Format
Ministry of Corporate Affairs (MCA) vide General Circular No. 8/2012 dated May 10, 2012 has mandated filing of Cost Audit Reports and Compliance Reports in XBRL format from the financial year 2011-12.

Central Government vide General Circular no. 43/2012 dated December 26, 2012 has extended filing of the Compliance Report in XBRL format till January  31, 2013.

Any valid Member of the Institute of Cost Accountants of India who is either in full-time employment with the concerned company or is holding full-time Certificate of Practice can only certify the Compliance Report. Provided he is not signing the Compliance Report as Company Secretary or as Director of the company.

General Instruction for Filing the Compliance Report in XBRL Format
1. The Compliance Report approved by the Board should be used as source for creation of the XBRL instance Document.
2. The Compliance Report instance document should be generated are as per the costing taxonomy notified by MCA. The instance document should comply with the following conditions:

a. Completeness: All the required information is reported in accordance with the Business Rules in respect of Costing Taxonomy i.e. ensure that all mandatory items are reported.
b. Mapping: The elements tagged should be consistent with the meaning of the associated cost concepts in the Compliance Report.
c. Accuracy: The amounts, dates, other attributes (for example, Monetary units), and relationships (order and calculations) in the instance document should be consistent with the Compliance Report.
d. Structure: XBRL instances are structured in accordance with the costing taxonomy.

3. The XBRL Instance Document of Compliance Report is to be prepared on the basis of audited/certified cost data and other statements of the company. To fulfill the requirement of filing the cost data and other information as per the notified costing taxonomy, the MCA has issued necessary amendments for both cost audit report rules and compliance report.
4. The Compliance Report should be prepared in hard copy for the approval of the Board of Directors containing all the data that is to be filed with signatures of the cost accountant, Company Secretary and a Director. The cost accountant should take a human readable printout of the final instance document rendered by the software tool to create the Instance Document and the same should be preserved before uploading the requisite files on the MCA21 Portal.

As of now the costing taxonomy does not permit any extensions. All the facts need to be reported with the help of elements defined in the taxonomy.
6. “Product or Activity Group classification” in the instance document should be strictly in accordance with the notification issued by the Ministry of Corporate Affairs vide S.O. No. 1747(E) dated 7th August 2012.

The Companies (Cost Accounting Records) Rules 2011 as well as the 6 Regulated Industries cost accounting records rules notified by the MCA contained the Compliance Report format and Annexure to the Compliance Report. A number of information was contained in the e-Form for filing of the Compliance Report. In the Costing Taxonomy for Compliance Report, the information contained under “General Information” in the e-form has been merged and the entire information has now been made a part of the information required to be filed in the Compliance Report

Frequently Asked Questions

Some of the FAQ on companies (Cost Accounting Records) Rules ,2011 and the answer given by the institute of Cost Accountants of India is reproduced here for your information:

1. What is the legal authority of the Companies (Cost Accounting Records) Rules 2011?
Central Government, in exercise of the powers conferred by clause (b) of sub-section (1) of section 642 read with clause (d) of section 209 of the Companies Act, 1956 (1 of 1956), has notified Companies (Cost Accounting Records) Rules 2011.

2.    Under which authority the Companies (Cost Audit Report) Rules are issued?
Central Government, in exercise of the powers conferred by clause (b) of sub-section (1) of section 642 read with sub-section (4) of section 233B, and sub-section (1) of section 227 of the Companies Act, 1956 (1 of 1956), and in supersession of the Cost Audit Report Rules, 2001 has issued these rules.

3. What does turnover mean under these Rules? Is gross turnover Inclusive of excise
duty?
As per Rule 2(p), “Turnover” means gross turnover made by the company from the sale or supply of all products or services during the financial year. It includes any turnover from job work or loan license operations but  does not include any non-operational income. The term “Turnover” defined in the Companies (Cost Accounting Records) Rules, 2011 shall exclude taxes & duties. It shall have the same meaning, wherever it appears, in all other orders/rules issued in connection with the cost accounting records and cost audit.

4. What constitutes the cost records under Rule 2(e)? Whether the format of
“Abridged Cost statement” prescribed in the Companies (Cost Audit Report) Rules,
2011 can be considered as a sample cost statement?
Books of account and other records relating to utilization of materials, labour and other items of cost that provides data/information to compute the cost of production, cost of sales and margin of each of the products/activities of the company on monthly/quarterly/half-yearly/annual basis are considered part of the cost records. It includes statistical, quantitative and other records which enable the company to exercise, as far as possible, control over the various operations and costs with a view to achieve optimum economies in utilization of resources. Cost records are required to be maintained on continuous basis from the basic stage of inputs to the final output.

There cannot be any exhaustive list of cost records. This would depend on the materiality of cost components in the cost of the product/activity.

The abridged cost statement can be used as a sample cost statement. This may be modified according to the need of the company.

5.A company has been in existence since 1990 and is covered under cost audit for the first time in 2011-12. Whether it is mandatory to indicate previous year figure while submitting the report?
A company coming under the purview of the Cost Audit for the first time, the cost auditor shall mention figures for the previous year (s) certifying by means of a note that the figures so stated are on the basis of information furnished by the management, for which he has obtained a certificate from them.

6. What are circumstances under which a company can apply for exemption from application of the Companies (Cost Accounting Records) Rules 2011 or Companies (Cost Audit Report) Rules 2011?
There is no exemption available to a company from the provisions of Companies (Cost Accounting Records) Rules 2011 or Companies (Cost Audit Report) Rules 2011.


PENAL PROVISIONS FOR NON-COMPLIANCE:
NON-COMPLIANCE BY COMPANY
If a Company contravenes any provision of this circular, the company and every officer thereof who is in default, including the persons referred to in sub-section (6) of Section 209 of the Act shall be punishable as provided under sub-section (2) of Section642 read with sub-section (5) and (7) of Section 209 and sub-section (11) of Section 233B of Companies Act, 1956.
Relevant provisions of Section 209 of the Companies Act, 1956 are as follows:

Sub-section (5) of Section 209 provides that if any of the persons referred to in sub-section (6) fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company there under, he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both:

Provided that in any proceedings against a person in respect of an offence under this section consisting of a failure to take reasonable steps to secure compliance by the company with the requirements of this section, it shall be a defence to prove that a competent and reliable person was charged with the duty of seeking that those requirements were complied with and was in a position to discharge that duty:

Provided further that no person shall be sentenced to imprisonment for any such offence unless it was committed wilfully.

Sub-section (6) of Section 209 provides that the persons referred to in sub-section (5) are the following, namely:—

(a) where the company has a managing director or manager, such managing director or manager and all officers and other employees of the company; and
(d) where the company has neither a managing director nor manager, every director of the company;

Sub-section (7) of Section 209 provides that  if any person, not being a person referred to in sub-section (6), having been charged by the managing director, manager or Board of directors, as the case may be, with the duty of seeing that the requirements of this section are complied with makes default in doing so, he shall, in respect of each offence, be punishable with imprisonment for a term which my extend to six months, or with fine which may extend to ten thousand rupees, or with both.

Relevant provision of  Section 642 of the Companies Act 1956 is as under:

Sub-section (2) of Section 642 provides that any rule made under sub-section (1) may provide that a contravention thereof shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which such contravention continues.
  
Non compliance by Cost Auditor:

If default ismade by the cost auditor in complying with the aforesaid provisions, he shall be punishable with fine, which may extend to five thousand rupees.
  
ANNEXURE TO THE COMPLIANCE REPORT
[See rule 2 and rule 5]
1.  GENERAL:
a
Name of the company
XXXX Private Limited
b
Registered office address:
New Delhi
c
Financial Year to which the Compliance Report Relates
2011-2012
2. QUANTITATIVE INFORMATION:
Sno.
Name or the Product or Service group
Unit
Annual Production
Net Sales



 (Quantity)
(Quantity)
 (Value in Rupees)
A
Produced /Manufactured Product Groups




1
Tools ……………… (4013)
Nos
2
NA

B
Services Groups

1
NA

2
NA



 0.00
C
Trading Activities ( Product Group wise)




1
Wholesale Trading of  ……. (8013)
Kgs
NA
2
Wholesale Trading of  Segments (8013)
Nos
NA
3
Wholesale Trading of …………………(8013)
Mtr
NA
D
Other Income




1
Interest Income



2
Income Tax refund



3
Others



4



5




Total



3
RECONCILIATION STATEMENT



 (Value in Rupees)
Net Margin (Profit /Loss) as per Cost Accounts 




A
From Produced / manufactured Product Groups



     
B
From Services Groups



                       
C
From Trading Activities



Total as per Cost Accounts



Add: Incomes not considered in Cost Accounts 




a
Interest Income



b
Income Tax refund



c
Others








Sub Total



Less: Expenses not considered in Cost Accounts  



a
Provision for Waranties




Exchange Difference(net)




Bad Debts Written off




Provision for doubtful Debts




Loss on sale of Fixed Assets








Sub Total



Add/less: Difference in Stock Valuation



Profit/(Loss) as per Financial Accounts 




  
Note :

The above given annexure looks very simple but professionals and corporate management must take seriously the importance of Net Margin ( Profit/loss) as per Cost Accounts from

---- produced /manufactured product groups
---- Trading Activities
---- Service Groups

Normally financial statement shows net profit from all activities , includes both operational and non-operational income . Though it is relatively easy to separate operational income and non-operational income , normally it is very difficult to separate net margin from manufacturing activity and trading activity from the financial statement. To arrive at exact margin under various activities , the company has to prepare documents as companies (cost accounting records) rules ,2011 .

A proforma to finding costing profit/loss under various heads is given below. The proforma gives a broad idea only . The company has to prepare detailed cost sheet  for each product to find profitability of each product and sum up those to arrive at the costing profit / loss of company as a whole.

STATEMENT SHOWING COST OF PRODUCTION AND SALES
XXXXXXX   PRIVATE LIMITED
Mannufacturing
Trading
Service
Sl.No
Particulars
Product 1
Product 2


Total
1
Material -Imported






Material -Indegenous





2
Processing Charges , if any





3
Utilities





4
Direct Employee Cost  (Note 2)





5
Direct Expenses (Note 3)





6
Consumables and Stores





7
Repair & maintanance





8
Quality Control Expenses





9
Research & Development Expenses





10
Technical Knowhow Fee / Royalty





11
Depreciation / Amortisation





12
Other production  Overheads (Note 4)




0
13
Total (1 to 12)
0
0
0
0
0
14
Add/Less: WIP Adjustments (Note 5)





15
Less: Credits for recoveries




0
16
Primary Packing Cost




0
17
Cost of Production/ Operations(12+13 to 17)
0
0
0
0
0
18
Increase /Decrease in Stock of Finished Goods (Note 6)




0
19
Less: Self/Captive Consumption




0
20
Other Adjustements(if any)




0
21
Cost of Production/ Operations/services sold(17+18 to 20))
0
0
0
0
0
22
Administrative Overheads (Note 7)




0
23
Secondary Packaging Cost





24
Selling & Distribution Overheads (Note 8)




0
25
Interest & Finance Charges




0
26
Cost of Sales(21+22 to 25)
0
0
0
0
0
27
Net Sales Realisation(Net of Taxes and Duties) (Note 9)





28
Margin (Profit/(Loss) as per cost Accounts (27-26)
0
0
0
0
0



            List of Industry/Activity under Cost Audit as on date
Effective on all Companies having turnover of Rs. 20 crores or more or having net worth of Rs. 5 crore or listed or getting listed in any Stock Exchange
S.No.
Name of the Industry
Description of Activity and Relevant Chapter Heading of the Central Excise Tariff Act, 1985
Effective from Financial Year commencing
1.
Telecommunication Industry
Act, process, procedure, function, operation, technique, treatment or method employed in relation to telecasting, broadcasting, telecommunicating voice, text, picture, information, data or knowledge through any mode or medium
1st April 2011
2.
Petroleum Industry
Chapter 27 of CETA 1985 or
Production, processing, manufacturing or mining of crude oil, gases [including Natural Gas, Compressed Natural Gas, Liquefied Petroleum Gas and regasified gases, etc. as defined in the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006)] or Biogas or any other petroleum products
1st April 2011
3.
Electricity Industry
Generation of electricity from any source of energy, and includes transformation, transmission, distribution, and/or supply of electricity by any mode, or medium
1st April 2011
4.
Sugar Industry
Chapters 17 and 22 of CETA 1985 or
Production, processing, or manufacturing of any form or grade of sugar, molasses, or alcohol (including ethyl alcohol, rectified spirit, absolute alcohol, denatured alcohol, power alcohol, or solvent blends etc. but excluding potable alcohol) by using any raw materials
1st April 2011
5.
Fertilizer Industry
Chapter 31 of CETA 1985 or
Fertilizers as defined in clause (h) of Section 2 of the Fertilizer (Control) Order, 1985 made under Section 3 of the Essential Commodities Act, 1955 (10 of 1955)
1st April 2011
6.
Pharmaceutical Industry
Chapters 29 and 30 of CETA 1985 or
Production, processing, or manufacturing of bulk drugs or formulations and includes the meaning assigned to them under the Drugs (Prices Control) Order 1995
1st April 2011



List of Industry/Activity under Cost Audit as on date
Effective on all Companies having turnover of Rs. 100 crores or more or listed or getting listed in any Stock Exchange
SNo.
Name of the Industry
Description of Activity and Relevant Chapter Heading of the Central Excise Tariff Act, 1985
Effective from Financial Year commencing
7.
Cement
Chapter 25, 38 and 68 of CETA 1985
1st April 2011
8.
Tyres & Tubes
Chapter 40 of CETA 1985
1st April 2011
9.
Steel
Chapter 72 and 73 of CETA 1985
1st April 2011
10.
Paper
Chapter 47 and 48 of CETA 1985
1st April 2011
11.
Insecticides
Chapter 38 (includes all classes of Insecticides as defined under clause (e) of section 3 of the Insecticides Act, 1986 (46 of 1968) and included in the schedule annexed to the said Act and as amended from time to time.
1st April 2011
12.
Glass
Chapter 70 of CETA 1985
1st April 2011
13.
Paints & Varnishes
Chapter 32 of CETA 1985
1st April 2011
14.
Aluminum
Chapter 76 of CETA 1985
1st April 2011
15.
Jute, Cotton, Silk, Woolen or Blended Fibers/Textiles
Chapters 50 to 63 of CETA 1985
1st April 2012
16.
Edible Oil Seeds and Oils (including vanaspati)
Chapters 12 and 15 of CETA 1985
1st April 2012
17.
Packaged Food Products
Chapters 2 to 25 (except Chapters 5, 6, 14, 23 and 24) of CETA 1985
1st April 2012
18.
Organic & Inorganic Chemicals
Chapters 28, 29, 32, 38 and 39 of CETA 1985
1st April 2012
19.
Coal & Lignite
Chapter 27 of CETA 1985
1st April 2012
20.
Mining & Metallurgy of Ferrous & Non-Ferrous Metals
Chapters 26 and 74 to 83 (except Chapters 76 and 77) of CETA 1985
1st April 2012
21.
Tractors & other Motor Vehicles (incl. automotive components)
Chapters 84, 85 and 87 of CETA 1985
1st April 2012
22.
Plantation Products
Chapters 8, 9, 21 and 40 of CETA 1985
1st April 2012
23.
Engineering Machinery (incl.
Chapters 84 and 85 of CETA 1985
1st April 2012


compiled by :

CMA Krishna Dasan.A
Mob: 9871128831
Email: aknair2002@cmaglobal.net.in