Cost audit is the compliance obligation companies most often discover late — usually when someone notices that maintaining cost records was mandatory two years ago and nobody was doing it.
It is also filed in XBRL, under its own taxonomy, which is a separate exercise from your AOC-4 XBRL conversion.
Two obligations, not one
They get conflated constantly, and they have different triggers.
Maintaining cost records is the wider obligation. Companies in specified industries above specified turnover thresholds must maintain cost records in the prescribed form.
Getting them audited is the narrower one. Only some of the companies that must maintain records must also have them audited by a cost accountant.
A company can be required to maintain cost records without being required to have a cost audit. It cannot be required to have a cost audit without being required to maintain records.
Who it applies to
The Companies (Cost Records and Audit) Rules, 2014 set out two tables of industries and products:
- Regulated sectors — including telecommunications, electricity, petroleum, drugs and pharmaceuticals, fertilisers and sugar.
- Non-regulated sectors — a longer list covering machinery, steel, cement, rubber, paper, textiles, construction, education, healthcare and many others, identified by product or activity against CETA headings.
Whether records and audit apply depends on the sector table your product or activity falls under, and on turnover thresholds specified in the rules. The thresholds differ between regulated and non-regulated sectors, and there are exclusions — including for companies whose export revenue in foreign exchange exceeds a specified proportion of total revenue, and for companies operating from a special economic zone.
Two traps worth naming:
The trigger is the product or activity, not your self-description. A company that thinks of itself as an engineering services business may have a manufacturing activity sitting inside it that falls squarely within the tables. The classification is done against what is actually produced.
Thresholds are tested on the immediately preceding financial year. A company that crossed the threshold last year is in scope this year — which means the obligation to maintain records for the current year began on 1 April, before anyone looked at the numbers.
The sequence: CRA-2, CRA-3, CRA-4
| Form | What it does | When |
|---|---|---|
| CRA-2 | Intimation of appointment of the cost auditor to the Central Government | Within 30 days of the board meeting approving the appointment, or 180 days from the start of the financial year, whichever is earlier |
| CRA-3 | The cost audit report itself, from the cost auditor to the company | Within 180 days of the end of the financial year |
| CRA-4 | Filing the cost audit report with the Central Government, in XBRL | Within 30 days of receiving the CRA-3 report |
CRA-4’s clock starts when you receive the report, not at the year end. That is the detail that catches people. A cost auditor who delivers CRA-3 on day 180 leaves you 30 days from that date — and the XBRL conversion has to happen inside that window.
For a 31 March 2026 year end: CRA-3 by roughly late September 2026, and CRA-4 within 30 days of whenever it actually arrives.
Note the CRA-2 date carefully. It is “whichever is earlier”, not later. A board that appoints the cost auditor in September has already missed it.
It is a separate XBRL exercise
This is the point that costs companies time.
CRA-4 uses the cost audit taxonomy, which is not the C&I taxonomy and not the Ind AS taxonomy. Your AOC-4 XBRL conversion does not cover it and cannot be reused for it. It is a distinct instance document, tagged against a different taxonomy, validated separately.
The cost audit taxonomy covers product and service groupings, cost of production, cost of sales, margins by product group, reconciliation between cost records and financial accounts, and the auditor’s observations. The data comes from the cost records and the CRA-3 report — not from the financial statements — which is why an accounts team cannot usually produce it without the cost auditor’s working papers.
Where CRA-4 filings go wrong
Product group classification. Products must be grouped against the prescribed classification. Getting this wrong is the single most common defect, and it propagates through every quantitative table in the report.
The reconciliation. The reconciliation between the cost records and the audited financial statements has to tie. Where it does not, the filing invites scrutiny of both.
Waiting for the cost auditor. The 30-day window from receipt of CRA-3 is short. If the conversion only begins when the signed report lands, and a classification question arises, the deadline is gone. The workable approach is to run the tagging in parallel against the draft report and finalise on signature.
Assuming last year’s tagging carries over. Product groups change, the taxonomy version may change, and comparatives have to be tagged against the correct context.
Late filing
Additional fees apply on the same basis as other MCA forms — ₹100 per day, with no upper limit.
Separately, the Companies (Cost Records and Audit) Rules and Section 148 provide for penalties on the company and its officers, and on the cost auditor, for contraventions. As with AOC-4, paying the additional fee gets the form filed; it does not by itself resolve the underlying default.
If your company has pending CRA-4 filings, check whether they can be cleared under CCFS-2026 before it closes on 31 August 2026 — details here.
A short checklist
- Does a cost audit apply? Check your products and activities against the regulated and non-regulated tables, and the turnover thresholds, for the preceding financial year.
- Is a cost auditor appointed? CRA-2 within 30 days of the board meeting or 180 days from the start of the year, whichever is earlier.
- Are cost records actually being maintained? In the prescribed form, through the year — not reconstructed in month twelve.
- When will CRA-3 arrive? Ask the cost auditor for a date and work backwards.
- Start the CRA-4 tagging against the draft, not the signed report.
Cost audit XBRL, from ₹2,999
We convert and file cost audit reports in CRA-4 — product group classification, full taxonomy tagging, validation against the MCA tool, and the reconciliation checked before anything is submitted. Reviewed by a qualified professional, returned in 2–3 working days, and nothing is filed until you have approved it.
Not sure whether cost audit applies to your company? Send us your CIN and your principal products or activities, and we will tell you.
Ask us → · +91 92898 96117, Monday to Saturday.
General information, not advice for your company. Cost record and cost audit applicability turns on your specific products, activities and turnover in the relevant year, and the rules have been amended more than once. Confirm the position with a cost accountant or with us before relying on it.
