SMEs may get to turn the page in book of accounts; new norms likely to ease compliance burden
In its report submitted with the Ministry of Corporate Affairs (MCA), the committee has suggested raising the turnover limit to Rs 75 crore in any of the past three years to maintain and audit cost records.
Currently, these turnover limits are fixed at Rs 25 crore for companies in six regulated sectors and at Rs 35 crore for those in 33 unregulated sectors for mandatory cost audits. Moreover, all these companies with a turnover of `35 crore or more are currently required to maintain cost accounts.
The MCA has now sought stakeholder comments on the report by the end of this month.
The turnover is essentially of the relevant products and services, as specified under the Companies (Cost Records and Audit) Rules, 2014, the report suggests.
The proposed recommendations also erase the differential turnover limits for regulated and unregulated sector companies to conduct cost audits. The move will effectively free all small and most medium enterprises from these compliance obligations, said the people cited.
Under the rules, cost records are books of accounts relating to the utilisation of materials, labour and costs of other items as applicable to the production of goods or services, in sync with Section 148 of the Companies Act.
The 11-member committee under Ashu Mathur, chief cost advisor at the expenditure department, was set up in October last year.
The cost accounts of companies are crucial for tax computation and obtaining government assistance, including under the production-linked incentive (PLI) schemes
