TaxTMI 
TaxTMI 
Cost Accounting Records (Mining and Metallurgy) Rules, 2001
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....ecified in the Appendix to these rules : Provided that these rules shall not apply to a company,- (a) the aggregate value of the machinery and plant installed wherein, as on the last date of the preceding financial year, does not exceed the limits as specified for a small scale industrial undertaking under the provisions of Industries (Development and Regulation) Act, 1951 (65 of 1951); and (b) the aggregate value of the turnover made by the company from sale or supply of all its products during the preceding financial year does not exceed ten crore rupees. 3. Maintenance of records - (1) Every company to which these rules apply shall, in respect of each of its financial year commencing on or after the 1st day of April, 2001 keep proper books of account containing, inter-alia, the particulars specified in Schedule I annexed to these rules and Proformae A,B,C,D,E and F, relating to the utilization of materials, labour and other items cost in so far as they are applicable to the mining, production, processing or manufacture of products referred to in rule 2 : Provided that if the said company is engaged in mining or manufacturing of any other product(s) or is engage....
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....;Uranium 2. Thorium 3. Zirconium 4. Titanium 5. Copper 6. Lead 7. Zinc 8. Nickel 9. Cobalt 10. Chromium 11. Gallium 12. Germanium 13. Platinum 14. Molybdenum SCHEDULE I [See rule 3] 1. MATERIALS: (1) The proper records shall be maintained showing separately all receipts, issues and balances both in quantities and cost of each item of raw material required for mining or production of products under reference by way of calcination, oxidation, electrolysis or any other method. Where the company have its own facilities to produce basic raw materials such as minerals from captive mines, ores, electrodes, power, etc., detailed records indicating the break up of raw materials consumed for their production and conversion cost, shall be maintained in such details so as to enable the ascertainment of the cost of these raw materials and intermediates. These records shall contain such details so as to enable the company to determine the quantity, cost of receipt (including all direct charges upto the works in respect of major raw material), issues and balances in quantity as well as value of each i....
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....back after processing and cost incurred thereon shall be maintained in detail. The net realization, if any, shall be adjusted against the major process relating to such by-product. The basis adopted for determining cost of the by-products shall be on equitable and reasonable basis and applied consistently. The records indicating the actual sales realization of by-products shall also be maintained. (5) The proper records shall be maintained to show the receipts, issues and balances, both in quantities and cost of each item of consumable stores, other chemicals not covered by sub-rule (2), tools and machinery spares. The cost shall include all direct charges upto works. (6) In the case of consumable stores and small tools the cost of which are insignificant, the company may, if it so desires, maintain such records for the group of such consumable stores and tools. (7) The cost of consumption of consumable stores, small tools and machinery spares shall be charged to the relevant cost centre or department on the basis of actual issues. (8) The proper records shall be maintained showing the quantity and value of wastage, spoilage, rejections and losses of r....
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....on activities of products under reference. Where the employees work in such a manner that it is not possible to identify them with any cost centre or department, the labour charges shall be apportioned to the cost centres or departments on equitable and reasonable basis and applied consistently. (3) The idle labour cost shall be separately recorded under classified headings indicating the reasons therefor. The method followed for accounting of idle time payments in determining the cost of the product shall be disclosed in the cost records. (4) Any wages and salaries allocable to capital works, such as, additions to plant and machinery, buildings or other fixed assets shall be accounted for under the relevant capital heads. 3. SERVICE DEPARTMENT EXPENSES: The detailed records shall be maintained to indicate expenses incurred in respect of each service department or cost centre like laboratory, welfare, transport etc. These expenses shall be apportioned to other services and production departments on equitable and reasonable basis and applied consistently. Where these services are utilized for other products of the company also, the basis of apportionment of such expenses....
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....ities: - The proper records showing quantity and cost shall be maintained in respect of any other utilities produced or purchased by the company for the production or manufacture of products under reference. (5) The cost statements for each utility shall be maintained in Proforma `A' 5. WORKSHOP OR REPAIRS AND MAINTENANCE OR TOOL ROOMS: (1) The proper records showing the expenditure incurred by the workshop or tool room under different heads and on repairs and maintenance in the various cost centres or departments shall be maintained. The records shall also indicate the basis of charging the workshop or tool room expenses to different cost centres or departments. Where maintenance work is done by direct workers of any production cost centre or department, the wages and salaries of such workers shall be treated as direct expenses of the respective cost centre or department. If the services are utilized for other products also, the manner of charging a share to such products shall be on equitable and reasonable basis and applied consistently. In addition to the above, records shall indicate the amount and also the proportion of closing inventory of stores and spa....
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....prising the other overheads. These expenses shall be analyzed, classified and grouped according to functions, namely, works, administration, selling and distribution. (2) Where the company is manufacturing other products not under reference, the records shall clearly indicate the basis followed for apportionment of the common overheads including head office expenses of the company to such other products and the products under reference, including capital works. Where certain expenses forming part of overheads can be identified with a particular activity or a product, such expenses shall be first segregated and charged to the relevant activity or product and thereafter the residue expenses under the above categories of overheads shall be apportioned on a reasonable and equitable basis and applied consistently. The overheads chargeable to capital works shall be indicated separately in the cost records. The basis of apportionment or absorption of overheads to the cost centres or departments and products shall be indicated in the cost records. The records shall be maintained in such a manner as to indicate the details of works, administration, selling and distribution overhead....
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....n determining the cost of products shall be indicated in the cost records and applied consistently. Adequate records shall also be maintained showing the melting loss in the remelting furnace. Adjustment for realisation from dross shall also be indicated in the cost records. 12. QUALITY CONTROL: The adequate records shall be maintained to indicate the expenses incurred in respect of quality control department or cost centre for products under reference. Where these services are also utilized for other products of the company, the basis of apportionment to products under reference and other products, shall be on equitable and reasonable basis and applied consistently. 13. INTEREST: The proper records shall be maintained for interest charges paid. The amount of interest shall be allocated or apportioned to the products covered under these rules and other activities on a reasonable and equitable basis and applied consistently. The basis of further charging of the share of the interest to the various types of products under reference shall also be on a reasonable and equitable basis and applied consistently. The basis of such allocation or apportionment shall be spelt ou....
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.... prepared in respect of each plant or factory. 18. PRODUCTION RECORDS: Quantitative records of all finished goods, whether packed or unpacked, showing production, issues for sales and balances of different types of the product under reference shall be maintained. 19. RECONCILIATION OF COST AND FINANCIAL ACCOUNTS: (1) The cost statements shall be reconciled with the financial statements for the financial year specifically indicating the expenses or incomes not considered in the cost records or statements so as to ensure accuracy and to adjudge the profit of the product under reference with the overall profit of the company. The variations, if any, shall be clearly indicated and explained. (2) A statement showing the total expenses incurred and income received by the company under different heads of accounts and the share applicable to the other products and the products under reference shall be prepared and reconciled with the financial statement. 20. ADJUSTMENT OF COST VARIANCES: Where the company maintains cost records on any basis other than actual such as standard costing, the records shall indicate the procedure followed by the company in ....
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....VI of GATT 94. 22. CAPTIVE CONSUMPTION: If any of the products under reference is used for captive consumption, proper records shall be maintained showing the quantity and cost of each such product transferred to other departments or units of the company for self-consumption. The rates at which the transfers are effected shall be at cost only. 23. POLLUTION CONTROL: Expenditure incurred by the company on various measures to protect the environment like effluent treatment, control of pollution of air, water, etc., should be properly recorded. 24. HUMAN RESOURCES DEVELOPMENT: Expenditure incurred by the company on the human resources development activity shall be recorded separately. PROFORMA `A' Name of the company : Name and address of the factory : Statement showing the cost of Utilities like Power, Steam, Water, etc., produced and consumed during the year/period : A. Quantitative Information: Serial number Particulars Current Year (unit) Previous Year (unit) 1. Installed capacity 2. Quantity produced 3. Capacity utilisation 4. ....
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....sp; B. Cost Information: Serial number Particulars Amount Per MT (Rupees) Current Year (Rupees) Previous Year (Rupees) 1. Direct wages and salaries 2. Utilities (a) Power (b) Others(specify) Total 3. Consumable stores and spares 4. Depreciation 5. Repairs and maintenance 6. Royalty 7. Other works overhead 8. Administrative Overhead (a)Salaries and wages (b)Others(specify) (c) Total(a+b) 9. Total cost of raising 10. Freight and Transport charges 11. Handling expenses 12. Total Cost 13. Adjustment for difference in the value of opening and closing stock 14. Cost of mineral transferred to Proforma 'C' Note 1.- Quanti....
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.... Less: Credit (for wastage and by-products) 14. Cost of production of Ore (11 to 13) Cost of Sales 15. Packing cost (a)Packing material (b)Direct wages and salaries (c)Other overheads 16. Selling and distribution Expenses (a)Salaries and wages (b)Freight and transport charges (c)Commission to selling agents (d)Advertisement expenses (e)royalty (f)Others (g)Total(a to f) 17. Interest 18. Total cost of sales excluding excise duty (14 to 17) 19. Total sales realization Less :(i)excise duty (ii)export incentives 20. Margin (19 - 18) Note 1.- Separate proforma shall be prepared for the quantity use....
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.... (c) Total(a+b) 13. Total(1 to 12) 14. Stock adjustment (Work-in-progress) 15. Less: Credits (from wastage and by-products) 16. Cost of production 17. Stock adjustment (finished products) 18. Total cost of basic metal/non-metal transferred to Proforma `E' Note 1.- If basic metal or non-metal under reference is sold as such without further processing or refining, the cost of sales and sales realisation shall also be shown in detail as illustrated against serial number 19 to 25 in Proforma `E' Proforma `E' Name of the company : Name and address of the factory : Statement showing the cost of production, cost of sales, sales realisation and margin in respect of each of the final products (metals and non metals, their minerals, ores and alloys) produced during the year/period : A. Quant....
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....nbsp; 16. Cost of production(13 to 15) 17. Stock adjustment (finished products) 18. Total (16+17) 19. Quantity and cost transferred for : (i) captive consumption (ii) sales 20. Packing Cost (a) Materials (b) Others 21. Selling and distribution Expenses (a) Salaries and wages (b) Freight and transport charges (c) Commission to selling agents (d) Advertisement expenses (e) royalty (f) Other (g) Total(a to f) 22. Interest 23. Total cost of sales excluding excise duty (19 to 22) 24. Total sales realization Less : (i)excise duty (ii)export incentives 25. Margin(24 - 23) &....