ICAI ask members not to air personal views on new cost rules
January, 09th 2015
The apex body of cost accountants ICAI has asked its members to restrain from airing their "individual interpretations" about modified norms pertaining to cost records and audit.
The Institute of Cost Accountants of India has said that it would be coming out with clarifications and guidance with regard to the new rules.
Earlier this week, the Corporate Affairs Ministry notified various amendments to the Companies (Cost Records and Audit) Rules.
Under the revised norms, entities having annual turnover of Rs 35 crore and above have to mandatorily maintain cost records.
"I...request all members to refrain from airing and circulating their individual interpretations of the rules and await clarifications from the institute," ICAI President A S Durga Prasad said in a message to the members.
The original rules, notified in June 2014, have been modified extensively following deliberations between stakeholders and the ministry.
ICAI's Technical Cell is analysing the rules in detail and would be providing guidance and clarifications to the members and industry.
"The amendment rules have now removed the ambiguity of identification of different sectors... The threshold limits of applicability have also been changed to a more practical approach," said the President's message, dated January 2.
"I thank all my council colleagues and other members of the profession for their continued support and guidance which enabled us to bring in modifications in the rules and providing clarity to the rules," it noted.
Besides, ICAI is in touch with the ministry for ironing out "certain errors that have crept in the notified rules".
As per the amended rules, the requirement of maintaining cost records would be applicable to certain class of companies that meet the threshold level of Rs 35 crore. Such entities have been broadly classified into 'regulated' and 'unregulated' sectors.
Entities engaged in six sectors have been brought under the regulated category. They are telecommunication services; power generation, transmission, distribution and supply; petroleum products; drugs and pharmaceuticals; fertilisers; sugar and industrial alcohol.
Those coming under these categories would also be required to carry out cost audits, if their overall annual turnover is Rs 50 crore or more and the aggregate turnover of the individual products or services -- where cost records are required -- is at least Rs 25 crore.
In the case of unregulated category, the Ministry has named 33 "industry/sector/product/service". The newly introduced ones include coffee and tea; milk powder; plastics and polymers; glass and textiles.