Cost Audit Applicability: 2011-12 and 2012-13

Cost Audit Applicability: 2011-12 and 2012-13

Maximum Organisations Covered vide new Cost Audit Orders dated 24 Jan 2012;;;

The Ministry of Corporate affairs has issued various Cost audit orders since 2/5/2011 and the latest cost audit order has been issued on 24/01/2012. Various industries are being brought under cost audit and also there is remarkable shift from the earlier practice of issuing companywise cost audit orders to industrywise cost audit order, that too on based on Excise classification codes. Also through various cost audit orders, the Ministry has clearly aligned the reporting of products under cost audit with the Central Excise Tariff Classification Codes.

The Ministry of Corporate Affairs issued  the following Cost audit orders:

Steps to check the applicability of cost audit

Various parameters to check the applicability of Cost audit are:

I)                    Turnover of the company

II)                  Listing Status

III)                Net Worth

IV)               Central Excise Classification Code

V)                 Specific Industry Nature of the company

1)      Check the industries as mentioned above. Firstly  Go through your excise return and check whether any of the products is cleared under any of the excise classification codes mentioned above, or the company falls under any of the industry covered under cost audit order dated 2^nd May 2011

2)      If Not, your company is not covered under cost audit apparently  provided the same has not been covered specifically earlier

3)      If yes,

a.       please check the turnover of the company for the year 2010-11 in respect of the companies where applicability year is 2011-12 and for the year 2012-13 where cost audit applicability is from the year 2012-13

b.      Also check whether the company is listed or not in case of companies covered through Excise classification codes

c.       Where companies are covered under order dated 2^nd may 2011, the networth criteria needs to be checked

A)                          The companies are required to see if any one of  the following criteria is fulfilled for companies falling under orders  dated 3^rd May, 30^th June and 24 Jan 2012, the company is covered under cost audit

a)      Companies having turnover exceeding Rs 100 crores in the immediately preceding financial year,

 or

b)      Companies whose equity or debt securities are listed or are in the process of listing

B)                           The companies are required to see if any one of  the following criteria is fulfilled for companies falling under orders  dated 2^nd May 2011, the company is covered under cost audit

a)     Aggregate Value of networth as on the last day of immediately preceding financial year year exceeds Rs. 5 Crores, or

b)      Companies having turnover exceeding Rs 20 crores in the immediately preceding financial year,  or

c)      Companies whose equity or debt securities are listed or are in the process of listing

We request you to contact us at 9810175020 in case of any further query.

Regards,

Navneet Kumar Jain

FCMA, MBA., LL.B., M.COM., PGDTL, AIIISLA., LIII

For N.K. Jain And Associates

9810175020

navneetic@yahoo.com,navneetic@rediffmail.com