1. Companies (Cost Records and Audit) Amendment Rules 2018
Discussion and Recommendations on DRAFT
AT WIRC ON 10 AUGUST 2018

2. Riders:
Effective Date 1st April 2017
Companies who have filed CRA-4 for NEED NOT FILE Cost Audit Report AGAIN

3. Principal Rules Substituted
Old
New
Para 7(m)
Overheads shall be classified according to functions, viz., works, administration, selling and distribution, head office, corporate etc.
Overheads shall be classified according to functions, viz., works, administration, selling and distribution, head office, corporate etc. Works overheads, also known as Production Overheads, Operation Overheads, Factory Overheads or Manufacturing Overheads, shall be the indirect costs involved in the production of a product or in providing service. Administrative overheads shall be the aggregate of cost of resources consumed in activities relating to general management and administration of an organisation. Selling and Distribution overheads shall be the aggregate of cost of resources consumed in the selling and distribution activities of the organization.

4. Rule Old New Para 7(q) Para 7(r) Para 7(s)
Assignment of Administration Overheads shall be in accordance with Para No. 8.
In case of leased assets, if the lease is an operating lease, the entire rentals shall be included in the administrative overheads. If the lease is a financial lease, the finance cost portion shall be segregated and treated as part of finance costs.
Para 7(r)
Marketing overheads that can be identified to a product or service shall be assigned to that product or service
Selling and Distribution Overheads, the benefits of which are expected to be derived over a long period, shall be amortized on a rational basis.
Para 7(s)
Marketing overheads that cannot be identified to a product or service shall be assigned to the products or services on the most appropriate basis.
Any demurrage or detention charges or penalty levied by the transportation or other authorities in respect of distribution activity shall not form part of Selling and Distribution Overheads

5. Impact
Para 7(m)- Addressing the Costs further into Indirect and Direct
Para 7 (q)- Distinguishing Operating Lease from Financials Lease
Para 7(r)- Identifying deferred Costs Amortization
Para 7(s)xxxxxxxxxxxxx

6. Paragraph no 8 Administrative Overhead
Administrative overheads shall be the aggregate of cost of resources consumed in activities relating to general management and administration of an organisation.
In case of leased assets, if the lease is an operating lease, the entire rentals shall be included in the administrative overheads. If the lease is a financial lease, the finance cost portion shall be segregated and treated as part of finance costs.The cost of software (developed in house, purchased, licensed or customised), including upgradation cost shall be amortised over its estimated useful life.
The cost of administrative services procured from outside shall be determined at invoice or agreed price including duties and taxes, and other expenditure directly attributable thereto net of discounts (other than cash discount), taxes and duties refundable or to be credited.
Any subsidy or grant or incentive or any amount of similar nature received or receivable with respect to any Administrative overheads shall be reduced for ascertainment of the cost of the cost object to which such amounts are related
Administrative overheads shall not include any abnormal administrative cost
Deleted

7. Cost Statements Rule Old New Para 28(a)
Cost statements (monthly, quarterly and annually) showing quantitative information in respect of each good or service under reference shall be prepared showing details of available capacity, actual production, production as per excise records, capacity utilization (in-house), stock purchased for trading, stock and other adjustments, quantity available for sale, wastage and actual sale during current financial year and previous year.
Cost statements (monthly, quarterly and annually) showing quantitative information in respect of each goods or service under reference shall be prepared showing details of available capacity, actual production, production as per excise records, production as per GST records, capacity utilisation (in-house), stock purchased for trading, stock and other adjustments, quantity available for sale, wastage and actual sale, total quantity of outward supplies as per cost records and total outward supplies as per GST records during current financial year and previous year

8. Cost Statements Rule Old New Para 28(c)
Cost Statements (monthly, quarterly and annually) in respect of reconciliation of indirect taxes showing details of total clearances of goods or services, assessable value, duties or taxes paid, CENVAT or VAT or Service Tax credit utilized, duties or taxes recovered and interest or penalty paid
Cost statements (monthly, quarterly and annually) in respect of reconciliation of indirect taxes showing details of total clearances of goods or services, assessable value, duties or taxes paid, CENVAT or VAT or Service Tax or GST, Credit utilised, duties or taxes recovered and interest or penalty paid.

9. Impact
1. Inclusion of GST and related records recognized

10. Principal rules CRA-3 Rule Old New Point 12 of Table 2 of Part A
Number of audit committee meeting attended by cost auditor during year
Number of audit committee meeting (s) during the year for which Cost Auditor was invited.
Number of audit committee meeting(s) attended by cost auditor during year.
Table4 of Part A
Extra ordinary income, if any
Exceptional and Extra Ordinary income
Other Comprehensive Income, if any
Table4 of Part A
Turnover as per Excise/Service Tax Records
Turnover as per Excise / GST records

11. Impact Point 12 Table 2 Part A- Onus on Company to Invite Cost Auditor
Table4 of Part A- Details of Extra ordinary Income to be mentioned
Table4 of Part A- Inclusion of GST and related records recognized

12. Rule Old New Point 3 Table 1 of Part B Part D Table3 (1)
Production as per Excise Records
Production as per Excise/ GST records.
Part D Table3 (1)
Gross Sales (excluding sales returns)
Revenue from Operations
Part D Table3 (2)
Less: Excise duty, etc.
Less: Taxes and other duties
Part D Table3 (3)
Net Sales
Net Revenue from Operations
Part D Table3 (9)
Add: Extra Ordinary Income
Exceptional and Extra Ordinary income
Other Comprehensive Income, if any
Table 6 of Part D
Table 6(A) of part D and will be applicable till 30th June 2017 and thereafter new table 6(B) shall be inserted

13. Impact
Point 3 Table 1 of Part B- Inclusion of GST and related records recognized
Part D Table 3- 1,2 and 3- Sales replaced by Revenue
Part D Table Other Income crystalized
GST dates recognized

14. Table 6(B)

15. Impact