Cost records and cost audit — is it applicable?
Enter turnover and sector details to see whether cost records and cost audit apply, with the CRA forms and their due dates.
✓Checked against the official Act and rules · verified 28 October 2026
Applicability check
Industries covered by the cost rules
Table A — regulated sectors
- Telecommunication services regulated by TRAI
- Generation, transmission, distribution and supply of electricity
- Petroleum products regulated by PNGRB
- Drugs and pharmaceuticals
- Fertilisers
- Sugar and industrial alcohol
Table B — non-regulated sectors
- Defence, space and atomic energy machinery
- Turbo jets and turbo propellers
- Arms, ammunition and explosives
- Propellant powders, fuses, detonators
- Radar and radio navigation apparatus
- Tanks and armoured vehicles (90% government funded)
- Port services regulated by TAMP
- Aeronautical services regulated by AERA
- Iron and steel
- Roads and other infrastructure projects
- Rubber and allied products
- Coffee and tea
- Railway or tramway locomotives and rolling stock
- Cement
- Ores and mineral products
- Mineral fuels (other than petroleum) and mineral oils
- Base metals
- Inorganic and organic chemicals
- Jute and jute products
- Edible oil
- Construction industry
- Health services — hospitals, diagnostic centres, test laboratories
- Education services
- Milk powder
- Insecticides
- Plastics and polymers
- Tyres and tubes
- Pulp and paper
- Textiles
- Glass
- Other machinery and mechanical appliances
- Electrical or electronic machinery
- Listed medical devices
Each item is matched by its Customs Tariff Act heading where one is given in rule 3. Check the heading of your product against the rule before deciding.
The thresholds
- Cost records: a company making a product or providing a service listed in Table A or B must keep cost records in Form CRA-1 if its overall turnover from all products and services was ₹35 crore or more in the previous financial year.
- Cost audit — regulated sectors (Table A): overall turnover ₹50 crore or more, and turnover of the covered products or services ₹25 crore or more.
- Cost audit — non-regulated sectors (Table B): overall turnover ₹100 crore or more, and turnover of the covered products or services ₹35 crore or more.
- Exemptions from cost audit: more than 75% of total revenue from exports in foreign exchange; operating from a special economic zone; captive power generation. Cost records may still be required.
- Not covered at all: companies that are micro or small enterprises under the MSMED Act, 2006.
Common questions
When is cost audit applicable?
For regulated sectors when overall turnover is ₹50 crore or more and covered products are ₹25 crore or more; for non-regulated sectors when overall turnover is ₹100 crore or more and covered products are ₹35 crore or more — in each case for the immediately preceding financial year.
When should CRA-2 be filed?
Within 30 days of the Board meeting that appoints the cost auditor. The appointment itself must be made within 180 days from the start of the financial year.
Are MSMEs covered by cost audit?
Companies classified as micro or small enterprises under the MSMED Act, 2006 are outside the cost records and audit rules. Medium enterprises are not excluded.
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