A cost auditor appointment is only complete once the company files Form CRA-2 — the Board appoints a cost accountant in practice within 180 days of the start of the financial year under Rule 6(1), and the company must then intimate the Central Government in CRA-2 within 30 days of that Board resolution or 180 days of the financial year start, whichever falls earlier.
Whether a company needs to do this at all turns on two separate thresholds: one for maintaining cost records at all, and a higher one for getting them audited. Both are turnover tests under the Companies (Cost Records and Audit) Rules, 2014, and both differ depending on whether the company sits in a "regulated" (Table A) or "non-regulated" (Table B) sector.
Forms revised: MCA notification G.S.R. 361(E) dated 30 May 2025 substituted Forms CRA-2 and CRA-4, effective 14 July 2025. The revised CRA-2 adds a "nature of appointment" field (fresh appointment, re-appointment or other) and an explicit cost-auditor consent confirmation; the revised CRA-4 adds fields on financial-year change and AGM-extension SRN details. Separately, MCA General Circular 07/2025 (27 October 2025) extended the CRA-4 due date for FY 2024-25 reports to 31 December 2025 without additional fee, citing stakeholder difficulty with the new form on the MCA V3 portal — that extension applied only to FY 2024-25; for FY 2025-26 the base 30-day-from-receipt rule applies unless a fresh circular says otherwise.
Cost records vs. cost audit — two different thresholds
A company producing goods or services listed in Rule 3's Table A (regulated sectors) or Table B (non-regulated sectors) must maintain cost records in Form CRA-1 once its overall turnover from all products and services is ₹35 crore or more in the immediately preceding financial year. That threshold triggers record-keeping only — it does not by itself trigger an audit.
A separate, higher threshold decides whether those records must actually be audited. Micro and small enterprises under the MSME Development Act, 2006 are exempt from both the record-keeping and audit rules regardless of turnover.
Cost audit applicability thresholds
| Sector table | Overall turnover (all products/services) | Turnover of the specific product/service under cost records |
|---|---|---|
| Table A (regulated) | ₹50 crore or more | ₹25 crore or more |
| Table B (non-regulated) | ₹100 crore or more | ₹35 crore or more |
Both conditions in a row must be met for cost audit to apply — overall turnover alone, or product turnover alone, is not enough.
Exemptions from cost audit
- Export revenue in foreign exchange exceeding 75% of total revenue.
- Companies operating entirely within a Special Economic Zone (SEZ).
- Companies generating electricity solely for captive consumption through a captive generating plant.
- Micro and small enterprises under the MSME Development Act, 2006.
An exemption from cost audit does not automatically exempt a company from maintaining cost records under CRA-1 — check both thresholds separately.
Appointment, CRA-2 and the two overlapping clocks
Rule 6(1) requires the Board to appoint a cost auditor within 180 days of the commencement of every financial year. Under Rule 6(1A), the auditor must first submit a certificate confirming eligibility, non-disqualification, that the appointment satisfies section 141 criteria, and disclosure of any pending proceedings before the Institute or its disciplinary committee.
The cost audit is conducted by a Cost Accountant in Practice — a member of the Institute of Cost Accountants of India holding a certificate of practice under the Cost and Works Accountants Act, 1959 — appointed by the Board. The company’s statutory auditor appointed under section 139 cannot double up as its cost auditor.
Form CRA-2, filed under section 148(3) and Rule 6(2)/6(3A), must reach the Central Government within 30 days of the Board meeting at which the appointment is made, or within 180 days of the commencement of the financial year — whichever is earlier. Missing one of those two clocks because only the other was tracked is the most common way this filing goes late.
A casual vacancy (resignation, death or removal) must be filled by the Board within 30 days of the vacancy arising, with a fresh CRA-2 filed within 30 days of that new appointment. The cost auditor’s tenure otherwise runs under Rule 6(3) until 180 days from the close of the financial year, or until the CRA-3 report is submitted for that year — whichever is earlier.
Remuneration is recommended by the Audit Committee where the company is required to have one, fixed by the Board, and then ratified by the shareholders — the exact mechanics of when audit-committee recommendation is mandatory versus optional for every company class are not fully settled in the publicly available commentary, so confirm against your company’s own audit-committee obligation under section 177 before relying on a blanket rule.
CRA-1, CRA-3 and CRA-4 — the rest of the form chain
| Form | What it is | Who files it, and when |
|---|---|---|
| CRA-1 | Format for maintaining cost records — not itself a government filing. | Maintained by the company on a monthly, quarterly, half-yearly or annual basis, for every financial year from 1 April 2014 onward. |
| CRA-2 | Notice of appointment of the cost auditor to the Central Government. | Company files within 30 days of the Board resolution or 180 days of FY start, whichever is earlier (Rule 6(2)/6(3A)). |
| CRA-3 | The cost audit report itself. | Cost auditor submits to the Board within 180 days of the close of the financial year (Rule 6(4)). |
| CRA-4 | Filing of the cost audit report with the Central Government, in XBRL. | Company files within 30 days of receiving CRA-3 from the auditor (Rule 6(6), section 148(6)). |
CRA-4 for FY 2025-26 (year-end 31 March 2026) is due 30 days after the company actually receives the CRA-3 report — not a fixed calendar date. A one-off circular pushed the FY 2024-25 CRA-4 deadline to 31 December 2025; check MCA’s current circular list rather than assuming that extension repeats.
Penalties for default
Section 148(8) applies section 147’s penalty structure to cost-audit defaults: the company and every officer in default face the section 147(1) fine, and a defaulting cost auditor faces the section 147(2)–(4) fine.
| Defaulting party | Penalty |
|---|---|
| Company (section 147(1)) | Fine of ₹25,000 to ₹5,00,000. |
| Officer in default (section 147(1)) | Fine of ₹10,000 to ₹1,00,000. |
| Cost auditor, ordinary contravention (section 147(2)) | Fine of ₹25,000 to ₹5,00,000, or 4 times the remuneration received — whichever is less. |
| Cost auditor, knowing/wilful contravention with intent to deceive (section 147(2)) | Imprisonment up to 1 year and fine of ₹50,000 to ₹25,00,000, or 8 times the remuneration — whichever is less. |
CRA-2 e-form fees follow the usual capital-based ROC filing slab (₹200 up to ₹600 depending on nominal share capital) — that slab is sourced from a filing-agency guide rather than the MCA fee-rules text directly, so treat it as indicative pending direct verification.
Cost auditor rotation, and how CRA-2 differs from ADT-1
There is no statutory rotation requirement for cost auditors. The mandatory rotation regime under section 139(2) — one 5-year term for an individual auditor or two 5-year terms for a firm, each followed by a 5-year cooling-off — applies only to statutory auditors, not cost auditors. A cost auditor can be reappointed year after year unless the company decides otherwise.
Cost audit under section 148 runs alongside, not instead of, the statutory financial audit under section 143 — filing CRA-2 does not touch the company’s ADT-1 obligation for its statutory auditor. The two filings also run on very different clocks: ADT-1 is due within 15 days of the AGM resolution confirming the statutory auditor, while CRA-2 is due within 30 days of a Board resolution (not an AGM) or 180 days of the financial year start, whichever is earlier — a materially longer and Board-driven window.
Primary sources
The dates and fees on this page are read off the statute and the MCA’s own published forms, not copied from other guides. You can check every one of them:
- Section 148, Companies Act, 2013 (cost records and cost audit)
- Section 147, Companies Act, 2013 — Punishment for contravention
- Rule 6, Companies (Cost Records and Audit) Rules, 2014 — appointment of cost auditor
- Form CRA-3 (pursuant to Rule 6(4)) — MCA document repository
- MCA XBRL cost-audit FAQ (CRA-4, 180-day and 30-day windows)
- MCA General Circular 07/2025 — CRA-4 due-date extension for FY 2024-25 (secondary report)
Verified against the Companies Act, 2013 / LLP Act, 2008, MCA rules and circulars as of September 2026. Your exact position depends on your entity and any notifications or circulars issued since — we confirm it for you, and always recommend checking the official MCA portal. CapEasy is a private consultancy and is not affiliated with any government authority. This page is a guide, not legal advice.