TaxTMI 
TaxTMI 
Applicability of cost audit to Pvt Ltd co.
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....pplicability of cost audit to Pvt Ltd co.<br> Query (Issue) Started By: - satbir singhwahi Dated:- 13-6-2026 Last Reply Date:- 13-6-2026 Corporate Laws / SEBI / LLP<br>Got 2 Replies<br>Companies Law<br>A pvt ltd company having Turnover of 202.75 Cr in FY 2025-26, dealing in manufacture of Knittted cloth, Dyeing and Garments. Whether Cost Audit applicable Reply By YAGAY andSUN: The Reply: Base....
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....d on the information provided, company is a Pvt Ltd Co. engaged in the manufacture of knitted cloth, dyeing & garments, with an aggregate turnover of Rs. 202.75 Crore during FY 2025-26. The applicability of Cost Audit is governed by Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time. The products manufactured by t....
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....he company fall under the Textiles Industry, which is covered under the industries specified in Rule 3 of the above Rules, 2014. So company is required to maintain cost records if the set turnover criteria are satisfied. For companies operating in the Non-Regulated Sector, Cost Audit becomes applicable where, during the nearly preceding FY: • overall annual turnover from all produc....
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....ts and services is Rs. 100 Crore or more; • aggregate turnover from the individual product(s) or service(s) covered under Rule 3 is Rs. 35 Crore or more. In the present case, the company's turnover for FY 2025-26 is Rs. 202.75 Crore, which exceeds the prescribed threshold of Rs. 100 Crore. Further, considering that company's principal business activities comprise manufactur....
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....e of knitted cloth, dyeing & garments, it is reasonable to infer that turnover from the specified products exceeds the threshold limit of Rs. 35 Crore. So, subject to verification of the product-wise turnover & applicability of any statutory exemption, company falls within the ambit of Cost Audit under Rule 4. So, company shall be required to appoint a Cost Auditor for conducting Cost Audit for....
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.... the financial year 2026-27, since the applicability is gritty based on the turnover criteria of the nearly preceding FY 2025-26. Reply By YAGAY andSUN: The Reply: However, before concluding applicability, it is necessary to examine whether the company is eligible for any exemption available under the Rules, including but not limited to: • Revenue from exports in foreign exchange....
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.... exceeding 75% of total revenue; • Qualification as a Micro or Small Enterprise under the applicable MSME criteria; • Operations carried out from a unit located in a SEZ In absence of above exemptions & subject to fulfilment of the set turnover criteria, Cost Audit shall be applicable, and the company would be required to comply with all consequential provisions relati....
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....ng to appointment of Cost Auditor, filing of Form CRA-2, maintenance of cost records, conduct of Cost Audit & filing of Cost Audit Report in prescribed manner under Companies Act, 2013 & Audit Rules, 2014.<br> Discussion Forum - Knowledge Sharing ....