Last updated: January 29th, 2024 2:11 PM

Cost Audit Report – Form CRA 4 Due Date Extension

On account of extraordinary disruption caused due to the COVID 19 pandemic, the Ministry of Corporate Affairs (MCA) vide notification dated 01.12.2020 has issued a Circular concerning the period of extension for the Filing of Form CRA-4 ( Cost Audit Report) for the financial year 2019-2020. As per this notification, the Cost Audit Report deadline for FY 2019-2020 has been extended to December 31, 2020, from the earlier deadline of November 30, 2020. The Ministry also provided relaxation of additional fees under the Companies Act, 2013. The Present article briefs the extensions so provided and tries to clear up the basic provisions relating to Cost audit and procedure to be followed for filing Form CRA 4.

Synopsis of Notification

The Ministry of Corporate Affairs is provided relaxation of additional fees and extension of the last date for filing of Form CRA-4 for the financial year 2019-2020.

• If the cost audit report for the financial year 2019-2020 is submitted by the cost auditor to the Board of Directors of the companies by 1st December 2020then the same will not be viewed as a violation of rule 6(5) of Companies (Cost Records and Audit) Rules 2014.
• The cost audit report for the financial year ended on 31st March 2020 will be filed in e-Form CRA-4 within 30 days from the date of receipt of the copy of the cost audit report by the company
• In case a company has availed an extension of time for holding an Annual General Meeting (AGM) then e-Form CRA-4 need to be filed within the timeline provided under the provision of rule 6(6) of the Companies (Cost Records and Audit Rules), 2014)

Cost Audit Report

Cost audit is the process of verification of cost accounts of a firm to determine the accuracy of cost accounting records. Cost audit will certify whether the cost accounting records are in track with the costing principles, plans, objectives, and procedures. The audit usually involves the following processes:

• Verification of accuracy of costing records
• Detection of errors in the cost records
• Checking of cost books, accounts, and records

Governing Law

Section 148 of the Companies Act, 2013 lays out the provisions and requirements concerning Cost Records and Cost Audit applicability. Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 identifies the companies that are required to keep Cost Records, undergo a Cost Audit, and submit Cost Audit Report.

Companies Required Conducting a Cost Record Audit

The following firms are required to file the Cost Audit Report in Form CRA-4 to Government:

• Regulated sectors dealing with specified goods/services which overall annual total turnover from all products/services is Rs.50 Crore or more

• Regulated sectors dealing with specified goods/services which aggregate turnover from the individual product/service is Rs.25 Crore or more
• Non-regulated sectors dealing with specified goods/services and overall annual total turnover from all products/services is Rs.100 Crore or more
• Non-regulated sectors dealing with specified goods/services aggregate turnover from the individual product/service is Rs.35 Crore or more

Exemption from Conducting a Cost Record Audit

The following firms are exempted from Conducting a Cost Record Audit

• The company’s export revenue in foreign exchange exceeds 75% of total revenue
• The company operates from a Special Economic Zone (SEZ)
• The company is engaged in the production of electricity through Captive Generating Plant

Applicable Forms – Cost Audit Report

Form CRA-1

The form CRA-1 is an important form in which cost records will be maintained and prescribes the detailed information about the cost element and their treatments etc.

Form CRA-2

Form of intimation of appointment of cost auditor by the company to MCA. Every company must file a notice of appointment of cost auditor with RoC through online in Form CRA-2 within a month of the board meeting in which the appointment is made or within 180 days from the date of commencement of the financial year.

Form CRA-3

This form CRA-3 provides a format in which the Cost auditor has to submit his cost audit report to Company. The cost audit report is a certificate containing five paragraphs on fifteen specific points:

• Cost accounting system and cost accounting records
• Inventory valuation
• Budgetary control system
• Related party transactions
• Payments default to the Governments / Banks
• Actual exports, Export benefits, and incentives on their profitability
• Internal audit
• Suggestions concerning cost control and cost reduction
• Independent audit opinion regarding the cost accounting records

After the audit is duly complete, the auditor will submit the Form CRA-3 to the firm. The Cost Audit Report in form CRA-3 must be submitted by the Cost Auditor to the firm within 180 days of closure of the financial year. The company must then furnish the cost audit report, with full details and explanations to MCA through Form CRA-4 along with the digital signature of the Cost Auditor.

Form CRA-4:

Form for filing Cost Audit Report with the Govt. On the receipt of the Cost audit report from Cost auditors, the firm needs to submit the same to Central Government in form CRA-4 within 30 days from obtaining the audit report.

Fee for filing CRA – 4 (Cost Audit Report)

The fee for filing CRA – 4 (Cost Audit Report) is tabulated here for reference according to the Companies (Registration Offices and Fees) Rules, 2014

Sl.No	Nominal Share Capital	Fee applicable
1	Less than 1,00,000	Rs. 200 per document
2	1,00,000 to 4,99,999	Rs.300 per document
3	5,00,000 to 24,99,999	Rs. 400 per document
4	25,00,000 to 99,99,999	Rs. 500 per document
5	1,00,00,000 or more	Rs. 600 per document

The fee for filing CRA -4 in case a company does not have share capital is Rs.200 per document and the foreign companies have to give Rs.6000 for filing.

Additional Fee (Penalty for Late Filing)

Sl.No	Period of Delays	All Forms
1	Up to 30 days	2 times of normal fees
2	More than 30 days and up to 60 days	4 times of normal fees
3	More than 60 days and up to 90 days	6 times of normal fees
4	More than 90 days and up to 180 days	10 times of normal fees
5	More than 180 days	12 times of normal fees

Note: As per the MCA notification dated 01.12.2020, the companies are exempted from the payment of an additional fee.

Documents Required

• eXtensible Business Reporting Language (XBRL) document in respect of the cost audit report and company’s information and explanations on every qualification and reservation contained
• Any other information can be provided as an optional attachment

Procedure for Filing of eForm CRA-4

The following steps can be used for filing the eForm CRA-4 on the MCA portal.

• The applicant needs to access the official website of the Ministry of Corporate Affairs (MCA) for Filing of eForm CRA-4. By login to the portal, the applicant can upload the e-form CRA-4.
• After login to the portal, provide the below-mentioned details:
  • Corporate identity number (CIN) or foreign company registration number (FCRN) of the firm
  • SRN of 23C or CRA-2 filed for appointment of Cost Auditor
  • Details of the financial year for which the report is being filed
  • Date of the meeting of the Board of Directors in which Annexure to the cost audit report was approved
  • Number of Industries or Service for which the Cost Audit Report is being submitted
  • Details of regulated sectors or non-regulated sectors for which the Cost Audit Report is being submitted
  • Details of prescribed industries under-regulated sectors/non-regulated sectors for which Cost Audit Report is not applicable
  • Details of the cost auditor appointed including, the number of cost auditor, category of cost auditor, membership number, name, and Firm registration number (FRN)
  • Date of the board meeting in which cost auditor was appointed
  • Type of appointment of cost auditor
  • Describe the scope of an audit of the cost auditor, firm or LLP
  • Date of receipt of a copy of the cost audit report by the company
  • Provide the details of cost auditor’s repost
• Attach the DSC of the person digitally signing the form. The person digitally signing the form can be any one of the following:
  • Director
  • Manager
  • CEO
  • CFO
  • The company secretary of the company
  • Authorized representative
• By clicking on the attach button, the required document can be uploaded and click on the pay payment button for making a processing fee.
• On successful submission of the form CRA-4, the eForm will be processed by the Ministry of Corporate Affairs.

The format of the e-Form CRA-4 is attached here for reference:

SRN Generation

SRN will be generated and displayed to the user on the successful submission of the form CRA-4. This SRN will be used for future correspondence with MCA.

Challan Generation

On successful submission, a challan will be generated providing the details of the fees paid by the company to the Ministry. This Challan is an acknowledgement to the applicant that the form CRA-4 has been filed. When the form CRA-4 is completely processed by the authority, an acknowledgement will be sent to the official mail of the company.