Applicability of (cost accounting records) rules 2011

Your company will not come under Cost audit report rules, but it will come under Cost Accounting record rules 2011, and your company needs to take cost compliance certificate from either Practicing Cost Accountant or Cost Accountant working in your company, if you take certificate from your employee cost accountant than make sure that employee should have membership of the institute(ICWAI) and have paid membership fees till date. 

Sir,

 The General Circular No. 67/2011 of MCA dated 30.11.2011 - Clarification about coverage of certain sectors states that the Companies (cost accounting records) rules 2011 is not applicable to Ancillary products/activities of companies incidental to their main operations and wherein the total turnover from the sale of each such ancillary product/activities do not exceed 2% of the total turnover of the company or 20 Crores, whichever is lower. 

In our case the turnover of fabshop is around 5 crores which does not exceed 2% of the total turnover of the company which is nearly 700 crores. Can you please clarify on the applicability of the Companies (Cost accounting records) rules 2011 for this year.

there are three criterion for the Cost accounting record rules, one is turnover( 20 crore), second is net worth( 5 crore) , third is listing with stock exchange. if you are covered under any one than you will be covered.

you may be not covered under turnover basis but you will be covered under net worth basis, if your net worth of the company is more than 5 crore than you will be covered, 

Company manufacturing sponge Iron under the chapter 72  & also produced steel(Ingot, TMT Bars), where sponge iron is the main raw materials under chapter 72. Sponge Iron  captively used & also sold to 3rd parties.

What are the criteria for applicable of Cost Audit.