It is compulsory to make Cost Records as per the Companies Act. for most of the large manufacturing companies.
Main Categories that are affected at MSME level are
- All Automotive Ancillaries
- All Paints and Chemicals Manufacturing Plants
- Many other categories
What if you dont make
See the provisions for this
the Rule says as under For Cost Records Maintenance and Cost Audit-
- Application of Cost Records3:-4For the purpose of sub-section (1) of Section 148 of the Act, the class of companies, including foreign companies defined in clause (42) of section 2 of the Act, engaged in the production of the goods or providing services, specified in the Table below, 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.
- Applicability for cost audit5 : (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.
Products and HSN Code
- Other machinery and Mechanical Appliances; 8403 to 8487
32. Electricals or electronic machinery; 8501 to 8507; 8511 to 8512; 8514 to 8515; 8517; 8525 to 8536; 8538 to 8547
on the Basis of the Terms and Conditions mentioned in the Above Rules it is clear Cost Records Applicability is there not of the Cost Audit as Its turnover is Less than 100 Cr.