For most companies with a 31 March year-end, the cost audit calendar is tightest right now. The cost auditor's report for FY 2025-26 (CRA-3) was due to the Board by 27 September 2026. The company then has 30 days from receiving it to file CRA-4 with the MCA. The appointment of the cost auditor for FY 2026-27 (CRA-2) was also due by 27 September.
If any of that is still pending, here's what applies to you and what to fix first.
Two separate tests: cost records and cost audit
Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 split this into two obligations. A company can fall under the first and not the second.
- Maintaining cost records (Rule 3) — for companies making the products or providing the services listed in the Rules, with overall turnover of ₹35 crore or more in the preceding financial year. Records are kept in Form CRA-1.
- Cost audit — regulated sectors (Table A), such as telecom, power, petroleum, drugs and pharmaceuticals, fertilisers and sugar. It applies where overall turnover is ₹50 crore or more and turnover of the individual product or service is ₹25 crore or more.
- Cost audit — non-regulated sectors (Table B), such as steel, automobiles, chemicals, machinery and defence equipment. It applies where overall turnover is ₹100 crore or more and turnover of the individual product or service is ₹35 crore or more.
Both tests use the preceding year's turnover. The audit test needs both conditions to be met: the overall turnover and the turnover of the specific product. A ₹120 crore company whose covered product contributes only ₹20 crore keeps cost records but doesn't need a cost audit.
Who is outside it
- Micro and small enterprises as classified under the MSMED Act. Since 1 April 2025, a small enterprise is one with investment of up to ₹25 crore and turnover of up to ₹100 crore, so more companies now fall outside. Check your classification afresh rather than relying on an old Udyam certificate.
- Companies whose export revenue in foreign exchange is more than 75% of total revenue.
- Units operating from a Special Economic Zone.
- Companies generating electricity only for their own captive use.
The last three are exemptions from the audit only. Check whether you still need to keep cost records.
The forms and their clocks
- Appoint the cost auditor. The Board appoints on the Audit Committee's recommendation, and the cost auditor must be a Cost Accountant in practice or a firm of them. Your statutory auditor cannot be your cost auditor. The members must ratify the cost auditor's remuneration at a general meeting.
- CRA-2: intimation of the appointment to the MCA. It is due within 30 days of the Board meeting or 180 days from the start of the financial year, whichever is earlier. For FY 2026-27, that's 27 September 2026 at the latest.
- CRA-3: the cost audit report. The cost auditor submits it to the Board within 180 days of the year-end.
- CRA-4: the company files the report with the MCA in XBRL, within 30 days of receiving it.
What changed recently
- Revised CRA-2 and CRA-4, effective 14 July 2025. CRA-2 now asks whether the appointment is fresh or a re-appointment, and requires a declaration that the cost auditor has consented. CRA-4 asks whether the auditor is the lead auditor, and, if the AGM was extended, the GNL-1 SRN and the revised AGM date.
- Proposed: personal liability on the CFO. The Corporate Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha in March 2026 and is with a Joint Parliamentary Committee. It proposes a penalty on the managing director, the whole-time director in charge of finance or the CFO where cost records aren't kept properly: ₹5 lakh in a listed company and ₹50,000 in any other company. It also proposes daily penalties for missed appointments and filings. This is not law yet, but it shows where enforcement is heading.
Where companies usually go wrong
- Mapping products to the wrong heading, so a covered product looks uncovered, or the other way round. Check the product codes in the Rules against what you actually sell.
- Assuming that no audit means no records. Many companies between ₹35 crore and ₹100 crore turnover need cost records but have never kept them.
- Missing CRA-2 on re-appointment. The same auditor still needs a fresh CRA-2 every year.
- Treating cost records as a year-end job. Material, labour and overhead records rebuilt in August rarely reconcile with the financial books, and the cost auditor has to report that reconciliation.
A default under Section 148 exposes both the company and its officers in default to penalties, and late MCA filings attract additional fees on top. If CRA-2 or CRA-4 is late, file as soon as possible. The longer it waits, the more it costs.
How Vitt-Marg helps
Cost audit is a CMA's own discipline. We check whether Rules 3 and 4 apply to each of your products, set up cost records that reconcile with your books, and coordinate the appointment, CRA-2, CRA-3 and CRA-4 so none of the deadlines slip. If last year's cost audit or filing is still pending, we'll start there.
General information, current as of October 2026, not advice for a specific case. Company-law rules and thresholds change often — check with us before acting on it.