Executive Summary:
This notification from the Ministry of Corporate Affairs amends the Companies (Cost Records and Audit) Rules, 2014. The amendments, effective from July 1, 2017, replace references to the "Central Excise Tariff Act Heading" with "Customs Tariff Act Heading" and are prompted by the enactment of the Central Goods and Services Tax Act, 2017. These changes affect the interpretation and application of cost record and audit rules for companies.
Key Points / Main Content:
Amendments to Companies (Cost Records and Audit) Rules, 2014:
* These rules are called the Companies (Cost Records and Audit) Second Amendment Rules, 2017.
Rule 2 Amendment:
* Clause (aa) in rule 2 is substituted with a new definition, effective July 1, 2017:
* "Customs Tariff Act Heading" refers to the heading in the Additional Notes in the First Schedule to the Customs Tariff Act, 1975.
Rule 3 Amendment:
* In rule 3, the phrase "Central Excise Tariff Act Heading" is replaced with "Customs Tariff Act Heading," effective July 1, 2017.
Form Amendments:
* In Form CRA2, CRA3, and CRA4 (Annexure), "CETA Heading" is replaced with "CTA Heading," effective July 1, 2017.
Impact Analysis:
Companies Subject to Cost Audit:
Impact: Companies required to maintain cost records and undergo cost audits must now use the "Customs Tariff Act Heading" as defined in the amended rules instead of the previous reference.
Action Required: Update internal systems, documentation, and reporting processes to reflect the change in terminology from "Central Excise Tariff Act Heading" to "Customs Tariff Act Heading" with effect from July 1, 2017.
Cost Auditors:
Impact: Cost auditors need to be aware of the change in terminology and ensure that cost records and audit reports comply with the amended rules.
Action Required: Familiarize themselves with the new definition of "Customs Tariff Act Heading" and apply it in their audits, specifically in Form CRA2, CRA3 and CRA4.
Ministry of Corporate Affairs:
Impact: Responsible for ensuring compliance with the amended rules.
Action Required: Monitor and enforce the amended rules, and provide guidance to companies and cost auditors as needed.
Key Entities Referenced
Ministry of Corporate Affairs: The Indian government ministry responsible for administering the Companies Act 2013 and other laws and regulations related to corporations.
New Delhi: The capital city of India where the notification was issued.
Companies Act, 2013: An Act of the Parliament of India that regulates incorporation of companies, responsibilities of a company, directors, dissolution of a company, and other related matters.
Companies cost records and audit Rules, 2014: Rules pertaining to the maintenance of cost records and the audit of cost records of companies as per the Companies Act, 2013.
Customs Tariff Act, 1975: An Act related to customs tariffs, duties and related matters.
Central Government: The executive authority in India responsible for making and implementing laws and policies.
Central Goods and Services Tax Act, 2017: An Act of the Parliament of India to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government.
Amardeep Singh Bhatia: Joint Secretary in the Ministry of Corporate Affairs, Government of India.
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MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 20th December, 2017
G.S.R. 1526(E).—In exercise of the powers conferred by sub-sections (1) and (2) of section 469 and
section 148 of the Companies Act, 2013 (18 of 2013) (hereinafter referred as the Act), the Central
Government hereby makes the following rules further to amend the Companies (cost records and audit)
Rules, 2014, namely:—
1. These rules may be called the Companies (cost records and audit) Second Amendment Rules, 2017.
2. In the Companies (cost records and audit) Rules, 2014 (hereinafter referred to as the principal rules), in
rule 2, for clause (aa) the following clause shall be substituted and shall be deemed to have been substituted
with effect from the 1st day of July, 2017, namely:-
(aa) “Customs Tariff Act Heading” means the heading as referred to in the Additional Notes in the
First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
3. In the principal rules, in rule 3, for the words “Central Excise Tariff Act Heading”, occurring at both
the places, the words “Customs Tariff Act Heading” shall be substituted and shall be deemed to have been
substituted with effect from the 1st day of July, 2017.
4. In the principal rules, in the Annexure, in Form CRA-2, Form CRA-3 and Form CRA-4, for the words
“CETA Heading”, wherever it occurs, the words “CTA Heading” shall be substituted and shall be deemed to
have been substituted with effect from the 1st day of July, 2017.
[F. No. 1/40/2013-CL-V]
AMARDEEP SINGH BHATIA, Jt. Secy.
Explanatory Memorandum: It is certified that no person is being adversely affected by giving
retrospective effect to this notification. The proposed amendments have been made on account of enactment
of the Central Goods and Services Tax Act, 2017 (12 of 2017).
Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i), vide number G.S.R. 425(E), dated the 30th June, 2014 and amended vide number
G.S.R. 01(E), dated the 31st December, 2014 and vide number G.S.R. 486(E), dated the 12th June,
2015 and vide number G.S.R. 695(E), dated the 14th July, 2016 and vide number G.S.R. 1498(E),
dated the 7th December, 2017.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.