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Applicability of cost records

27 December 2018

Respected Members,

Since applicability of maintenance of Cost Records shall be for those sectors which are mentioned in the tables (Table A – Regulated sectors and Table B – Non-regulated Sectors) and Company’s overall turnover from all its products and / or services (from the products / services as mentioned above) shall be Rupees thirty five crore or more during the immediately preceding financial year.

I have a doubt about turnover whether turnover include sales of only mfg. products (say 10 crore) or also only traded items of same HSN (say 100 cr.) and appicability of cost records ?

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9 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 27 December 2018

it includes sale of products or services. What you want to say be precise in your last statement

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Rajendra Sewda (none) (89 Points)
Replied 27 December 2018

A company having turnover of Rs. 110 crore in previous year which include sale of Manufactured products sales 10 cr and traded goods (only buy and than sale - not manufactured ) sales 100 cr. So whether maintenance of cost records is applicable

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 27 December 2018

Originally posted by : Rajendra Sewda
	A company having turnover of Rs. 110 crore in previous year which include sale of Manufactured products sales 10 cr and traded goods (only buy and than sale - not manufactured ) sales 100 cr. So whether maintenance of cost records is applicable

Yes.

ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 27 December 2018

Every company mentioned in sectors Table A & b includes foreign company engaged in production of goods & providing services having its overall turnover from all of its products & services of RS 35 cr or more during immediately p.y. cost audit is reqd . this threshold limit covers all manufacturerd product( including sector mentioned in table A or table B also other product) trading goods or other products also

CMA Satish Kumar Gupta (CMA) (232 Points)
Replied 01 January 2019

Mr. Rajendra Sewada,

As per cost audit rules company is covering under cost audit. Your company turnover is more than 100 cr. and product which is covered under cost audit turn over is more than 35 cr.
it doesn't matter if it is partly traded and partly manufactured. only full trading company will be exempted.

regards
CMA Satish Kumar Gupta
Practicing Cost Accountant, Indore

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Rajendra Sewda (none) (89 Points)
Replied 02 January 2019

Thanks for the response.
Here is trading turnover is 100 crore and turnover of Manufactured product only 10 crore. Whether gross turnover will be considered 110 cr. for applicability for maintenance of cost records (since both (traded and mfg. HSN same). And is here maintenance of cost records is applicable?