Question 1

Which companies must maintain cost records and file CCFS for FY 2025-26?

Accepted Answer

Under Rule 3 read with Rule 4 of the Companies (Cost Records and Audit) Rules 2014, companies in regulated sectors listed in Table A (pharmaceuticals, fertilisers, sugar, electricity, petroleum, etc.) with annual turnover of Rs 50 crore or more, and companies in non-regulated sectors in Table B with turnover of Rs 100 crore or more, must maintain cost records under Section 148(1) of the Companies Act 2013. The Cost Compliance Format Statement (CCFS) certifies that cost records have been maintained in Form CRA-1.

Question 2

What is Form CRA-4 and when must it be filed?

Accepted Answer

Form CRA-4 is the MCA21 e-form prescribed under Rule 6(6) of the Companies (Cost Records and Audit) Rules 2014 for submitting the Cost Audit Report together with the full cost statements and CCFS to the Central Government. It must be filed within 30 days of receipt of the Cost Audit Report by the Board of Directors, subject to an outer limit aligned with the financial statement filing deadline under Section 137 of the Companies Act 2013. Additional fees under Section 403 and prosecution under Section 147 apply for late or non-filing.

Question 3

Who is eligible to conduct a cost audit and how is the Cost Auditor appointed?

Accepted Answer

Only a Cost Accountant in practice holding a Certificate of Practice from ICAI-CMA (FCMA or ACMA) qualifies as a Cost Auditor under Section 148(3) of the Companies Act 2013. The Board appoints the Cost Auditor before the end of FY and must file Form CRA-2 on MCA21 within 30 days of appointment to intimate the Central Government. The appointment is ratified by shareholders at the Annual General Meeting. An existing statutory auditor cannot hold both roles simultaneously.

Question 4

What cost records must be maintained and for how long?

Accepted Answer

Rule 5 of the Companies (Cost Records and Audit) Rules 2014 requires cost records in Form CRA-1 covering material consumption, utilities, direct labour, overheads, royalties, packing costs, and cost of production per product or service. Records must be maintained regularly so that cost of production and cost of sales can be computed for each product covered by the rules. Retention period is a minimum of 8 years from the end of the financial year. The records must be kept at the registered office or principal place of business.

Question 5

What penalties apply for failure to maintain cost records or file the Cost Audit Report?

Accepted Answer

Section 147 of the Companies Act 2013 imposes penalties on both the company and every officer in default: imprisonment up to one year, or a fine between Rs 25,000 and Rs 5 lakh, or both. The Cost Auditor who fails to submit the report within the prescribed time faces a fine between Rs 25,000 and Rs 5 lakh. Where cost records are found deficient, the Central Government may order a special audit under Section 148(5). MCA has periodically issued prosecution notices for non-filing of CRA-4, making timely compliance important.

Ccfs 2026

Related Services

Cost Audit — CRA-2 & CRA-4 Filing

Company Annual Filing — AOC-4 & MGT-7

Statutory Audit under Companies Act 2013