Introduction:CRA-1 to CRA-3 Compliance Calendar for Indian Companies [2025]

Cost audit compliance is a critical statutory requirement for many Indian companies under the Companies Act 2013 and the Companies (Cost Records and Audit) Rules, 2014. Cost audit aims to ensure transparency and accuracy in recording the cost of production or services, thereby safeguarding stakeholder interests and supporting regulatory oversight. With the growing emphasis on regulatory adherence, cost audit compliance has become non-negotiable for sectors such as manufacturing, pharmaceuticals, power, and other regulated industries.

For companies subject to cost audit, understanding the timeline and process involved in maintaining cost records and filing mandatory forms such as CRA-1, CRA-2, and CRA-3 is essential to avoid penalties and legal complications. One common challenge companies face is managing multiple deadlines throughout the financial year, which, if overlooked, can lead to costly repercussions.

This is where having a month-wise compliance calendar becomes invaluable. A clear, structured calendar not only helps companies streamline their cost audit process but also ensures that no statutory deadlines are missed. This proactive approach significantly reduces the risk of fines, audit objections, and reputational damage.

In this blog, we will cover the crucial aspects of cost audit compliance, focusing on the CRA-1 cost record maintenance, the CRA-2 cost auditor appointment process, and the CRA-3 cost audit report filing. We’ll break down each stage into a month-wise action plan to help companies manage compliance efficiently throughout the financial year. Whether you are a company director, cost accountant, or compliance officer, this guide will help you stay ahead with your cost audit responsibilities in 2025 and beyond.

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CRA-1: Start Early with Cost Records (April – June)

The foundation of a smooth and compliant cost audit process lies in the proper maintenance of cost records, as mandated under CRA-1 of the Companies (Cost Records and Audit) Rules, 2014. CRA-1 essentially details the nature and format of cost records that companies must keep based on their industry and business activities.

Applicability of CRA-1

CRA-1 applies to companies engaged in manufacturing, production, or services that fall under sectors notified by the Ministry of Corporate Affairs (MCA) as requiring cost audit. These sectors include, but are not limited to, pharmaceuticals, cement, electricity generation, steel, telecom, and petroleum products. The key factor is the threshold limits related to turnover or production capacity, which decide whether a company must maintain cost records under CRA-1.

What Cost Records Must Be Maintained?

The essence of CRA-1 compliance is maintaining detailed and accurate cost records that reflect the true cost of production or services. The records typically include:

• Material consumption records: Documentation of raw materials, components, and packing materials used in the production process.

• Labor costs: Direct and indirect labor costs involved in manufacturing or service delivery.

• Overheads: Factory, administrative, and selling expenses that contribute to the total cost.

• Work-in-progress (WIP): Value of partially completed goods or services at any point during the accounting period.

• Finished goods inventory: Records of finished products held in stock.

• Cost of services: For service providers, detailed recording of all cost components related to service delivery.

Best Practices for Industry-Specific Formats

CRA-1 recognizes that different industries have unique costing needs, so it provides a framework to maintain records in formats best suited for specific sectors. For instance:

• Manufacturing companies focus heavily on material consumption and process cost sheets.

• Service companies maintain detailed timesheets and expense logs to track service costs.

• Power generation companies maintain fuel consumption and plant maintenance costs records.

Adopting industry-specific templates and formats helps companies not only comply with CRA-1 but also enhances internal cost control and decision-making.

Tips for Automated Monthly Updates

Maintaining cost records manually can be error-prone and time-consuming. To ensure accuracy and timeliness:

• Invest in cost accounting software or ERP systems with cost module integration to automate data capture and record maintenance.

• Ensure monthly reconciliation of material consumption and labor costs with financial records to avoid discrepancies.

• Schedule periodic internal audits during April to June to review records and correct errors early.

• Maintain a document trail that includes bills, invoices, time logs, and production reports to support audit verification.

• Establish a cross-functional team involving finance, production, and compliance departments to ensure seamless data flow.

Starting early in the financial year—between April and June—helps companies align their cost accounting with financial reporting cycles and prepare adequately for the next compliance steps, such as auditor appointment and report filing.

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This detailed introduction and early compliance guidance will position your readers for smooth adherence to the cost audit calendar while targeting important keywords like CRA-1 cost records, cost audit compliance India, and cost audit calendar 2025.

Board Approval & CRA-2 Filing: Auditor Appointment Timeline (June – July)

The period between June and July is crucial in the cost audit compliance calendar because it marks the appointment of the cost auditor by the company’s board of directors and subsequent statutory filings. This stage sets the compliance process in motion and is governed by strict timelines under the Companies (Cost Records and Audit) Rules, 2014, specifically Rule 6(2).

Board Resolution Timeline: Within 180 Days from Financial Year Start

According to the Companies Act 2013 and the Cost Audit Rules, companies liable for cost audit must appoint a cost auditor within 180 days from the beginning of the financial year. For most companies operating on the April-March fiscal year, this means the board must pass a resolution by 30th September at the latest, but many prefer to do this earlier by June or July to allow sufficient time for filing and audit planning.

Passing the board resolution on time is critical as it officially appoints the cost auditor who will independently examine the cost records maintained under CRA-1. Delays or failure to appoint can trigger penalties and non-compliance notices.

CRA-2 Filing Deadline: Within 30 Days of Board Resolution

Once the cost auditor is appointed, the company must file CRA-2 with the Ministry of Corporate Affairs (MCA) within 30 days of the board resolution. CRA-2 is the statutory form notifying the MCA about the appointment or reappointment of the cost auditor.

CRA-2 filing is mandatory for all companies falling under the cost audit applicability criteria, including those in manufacturing, utilities, telecom, and pharma sectors. The form requires detailed information such as auditor name, membership number, appointment date, and company details.

Legal Basis Under Rule 6(2) of Companies (Cost Records and Audit) Rules, 2014

The legal foundation for timely cost auditor appointment and CRA-2 filing lies in Rule 6(2), which explicitly states the timeline and procedural requirements. It reinforces the importance of board approval and timely intimation to MCA, ensuring that the government and stakeholders remain informed about the company’s cost audit status.

Penalties Under Section 450 for Delay

Failure to comply with these timelines attracts severe penalties under Section 450 of the Companies Act 2013, which deals with failure to comply with orders or directions by regulatory authorities. Companies and officers-in-default may face:

• Fines up to ₹5,00,000

• Daily fines up to ₹5,000 for continuing default

This makes it imperative for companies to adhere strictly to the June-July timeline for board approval and CRA-2 filing. Late or non-filing not only invites penalties but can also delay subsequent audit steps, impacting overall compliance.

Best Practices to Ensure Timely Compliance

• Schedule board meetings early in the financial year to approve the auditor appointment.

• Assign dedicated personnel to monitor deadlines and manage CRA-2 filings.

• Use MCA’s online portal for quick and transparent filing with acknowledgment receipts.

• Maintain communication with the appointed cost auditor to finalize timelines and audit scope.

By following these steps, companies can avoid penalties and set a solid foundation for a hassle-free cost audit.

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Cost Audit Execution: What Happens Between August – November

After the cost auditor is appointed and CRA-2 filed, the cost audit process enters its most intensive phase between August and November. This period is dedicated to the detailed execution of the cost audit, during which the auditor scrutinizes the company’s cost records, performs analyses, and prepares the audit report that will later be filed as CRA-3.

Cost Auditor Begins Detailed Review of Cost Records

The cost auditor’s primary task is to perform a thorough review of the cost records maintained as per CRA-1. This includes verification of:

• Material consumption statements

• Labor and overhead costs

• Work-in-progress and finished goods valuation

• Service cost accounting (where applicable)

The auditor ensures that these records are accurate, complete, and comply with the prescribed formats under the Companies Act and Cost Audit Rules.

Data Collection and Cost Ledger Scrutiny

During this phase, the auditor collects extensive data from various departments such as production, procurement, finance, and inventory. The auditor cross-checks this data with ledgers and journals to verify the authenticity and completeness of the cost entries.

This involves reconciling cost data with financial statements to detect discrepancies, inconsistencies, or potential misstatements.

Variance Analysis

A critical part of the cost audit is variance analysis — comparing actual costs with standard or budgeted costs to identify inefficiencies, cost overruns, or savings. Variance analysis not only aids the audit but also provides valuable insights for management to improve cost control and profitability.

Regular Communication Between Auditor & Company

To ensure a smooth audit process, the cost auditor maintains regular communication with company management and key stakeholders. This includes:

• Clarifying data queries

• Requesting additional documentation

• Discussing preliminary findings

• Addressing potential non-compliance issues early

Effective collaboration helps prevent delays in report preparation and filing.

Preparing for CRA-3 Report Filing

By the end of this phase, the auditor compiles the cost audit report, which must be filed with the MCA as CRA-3. This report summarizes the auditor’s findings and confirms compliance or highlights deviations in the cost accounting records.

Importance of Adhering to This Timeline

The August to November timeline aligns with statutory due dates to provide sufficient time for report finalization and filing by the mandated deadlines. Delays or incomplete audit work can lead to late filings, penalties, and increased scrutiny by regulators.

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Summary

The June to November period is a critical window in the cost audit compliance calendar. Timely board approval and CRA-2 filing ensure the appointment of a competent cost auditor who then conducts a thorough audit between August and November. Understanding these timelines and requirements helps companies mitigate risks, avoid penalties, and maintain regulatory compliance effectively.

CRA-3 Filing: Report Submission & Board Approval (December – January)

The months of December and January mark a pivotal phase in the cost audit compliance calendar — the preparation, submission, and approval of the cost audit report (CRA-3). This stage is crucial because it finalizes the audit findings and ensures statutory compliance under the Companies Act 2013 and Cost Records and Audit Rules, 2014.

Auditor to Submit the Cost Audit Report to the Company

Once the cost auditor completes the detailed audit, including verification of cost records and reconciliation with financial accounts, the next key responsibility is to submit the cost audit report (CRA-3) to the company’s board of directors. The auditor prepares this report following the prescribed format laid down by MCA, ensuring all mandatory annexures and disclosures are included.

This report encapsulates the auditor’s findings about the accuracy, completeness, and compliance of cost records, along with observations on cost efficiency and control. Any discrepancies or non-compliance issues are highlighted, providing the company with critical feedback for improvements.

Board Review and Approval of CRA-3

Once received, it is the board of directors’ duty to review and approve the CRA-3 report. The Companies Act mandates that the board must ensure that the report is thoroughly examined, and if needed, clarifications or further information should be sought from the auditor.

Board approval is not just a formality but a legal requirement to validate the report before it is filed with the Ministry of Corporate Affairs (MCA). The board’s endorsement confirms that the company acknowledges the cost auditor’s findings and is committed to addressing any issues raised.

Typically, companies schedule board meetings between December and January to discuss and approve the report within the stipulated timelines.

Responsibility of Cost Auditor vs Company in Accuracy and Timelines

Both the cost auditor and the company share distinct responsibilities during this stage:

• Cost Auditor: Accountable for preparing an accurate, comprehensive, and timely CRA-3 report that reflects the true state of cost records and audit observations. The auditor must adhere to audit standards and statutory guidelines to maintain the report’s credibility.

• Company: Responsible for facilitating timely board meetings for review, providing required support and documentation to the auditor, and ensuring that the report is filed within deadlines. The company must also respond to audit queries and rectify any issues highlighted in the report.

Failure by either party to meet these obligations can cause delays or non-compliance, attracting penalties and regulatory scrutiny.

Importance of Timely CRA-3 Filing

Timely preparation and board approval of the CRA-3 report are essential because this report forms the basis for CRA-4 filing with the MCA and acts as a critical compliance document for cost audit regulation.

Delays at this stage can have cascading effects on the entire compliance cycle, increasing the risk of late filing fees, legal actions, and reputational damage.

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CRA-4 Filing with MCA: Final Step (January – February)

The final milestone in the annual cost audit compliance calendar is the filing of CRA-4, the cost audit report form, with the Ministry of Corporate Affairs (MCA). This filing must be done within 30 days of receiving the CRA-3 report from the auditor, typically falling between January and February.

CRA-4 Filing Within 30 Days of CRA-3 Receipt

After the company’s board approves the CRA-3 report, the next statutory obligation is to file CRA-4 online with the MCA portal. CRA-4 is the official cost audit report form that confirms submission of the audit findings to the government and is a critical document for regulatory compliance.

This deadline is strictly enforced by the MCA, and companies must track the 30-day window carefully. Filing CRA-4 on time demonstrates commitment to transparency and adherence to audit regulations.

Mandatory XBRL Format for CRA-4 Filing

One significant update in recent years is the mandatory requirement to file CRA-4 in XBRL (eXtensible Business Reporting Language) format. XBRL is a standardized data format that facilitates better data validation, accuracy, and ease of analysis by regulators.

Companies must ensure their filing systems or external auditors’ software support XBRL tagging and submission. Non-compliance with this format can result in rejection or delays, so it is crucial to understand the technical requirements well in advance.

Late Filing Penalties and Maximum Fee Limits

Failing to file CRA-4 within the stipulated deadline results in monetary penalties under Section 148 and 450 of the Companies Act 2013. The penalties include:

• A daily late fee that accrues for every day of delay beyond the 30-day window.

• The maximum penalty cap, which varies based on company size and past compliance history but can reach significant sums running into lakhs of rupees.

For instance, a late fee of ₹5,000 per day may be imposed until the report is submitted. These penalties not only strain the company’s finances but also attract increased scrutiny from regulatory authorities like MCA and the Cost Audit Department.

How to Avoid CRA-4 Filing Penalties

• Plan ahead: Start preparing the CRA-3 report well before deadlines to allow sufficient time for board approval and CRA-4 filing.

• Use reliable software: Ensure XBRL-compatible tools or professional help to avoid technical glitches.

• Track deadlines meticulously: Assign responsibility within the company for calendar management and MCA portal filings.

• Engage experts: Consult with cost audit professionals or firms like SSCOIndia for end-to-end filing support.

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Summary

The December to February period represents the critical closure of the annual cost audit compliance cycle. Successful CRA-3 report submission and board approval followed by timely CRA-4 filing in mandatory XBRL format with MCA ensures companies meet all legal obligations under the Companies Act and Cost Audit Rules.

Adhering to this timeline helps businesses avoid hefty penalties, maintain regulatory goodwill, and demonstrate commitment to transparent and compliant cost accounting practices.

CRA Compliance Calendar [Table Format]

Maintaining a clear and well-structured CRA compliance calendar is critical for Indian companies mandated to undergo cost audit under the Companies Act, 2013. Adhering to month-wise deadlines for maintaining records, board approvals, auditor appointments, and MCA filings helps companies avoid penalties and ensures smooth statutory compliance. Below is a practical month-wise compliance calendar summarizing key activities and their corresponding forms and deadlines:

Explanation of Compliance Activities:

• April to June: CRA-1 Cost Records Maintenance
  Companies must diligently maintain cost accounting records throughout the financial year. This includes detailed logs of raw materials, labor, overheads, work-in-progress, and finished goods as prescribed under the Cost Records and Audit Rules, 2014.

• June to July: Board Resolution for Auditor Appointment
  The board must pass a resolution appointing the cost auditor within 180 days from the beginning of the financial year, complying with Rule 6(2) of the Cost Audit Rules. This is a critical governance step to kickstart the audit process.

• July: CRA-2 Filing
  Within 30 days of the board resolution, the company files CRA-2 online with MCA, officially notifying the government about the auditor appointment.

• August to November: Cost Audit Execution
  During this period, the appointed cost auditor conducts a detailed audit of cost records, performs variance analyses, and verifies compliance. Internal reviews by company management also happen concurrently.

• December to January: CRA-3 Report Submission
  The auditor submits the cost audit report (CRA-3) to the company, followed by board review and approval. Timely completion of this report is essential to avoid regulatory penalties.

• January to February: CRA-4 MCA Filing
  Finally, the company files the approved cost audit report (CRA-4) with MCA in the mandatory XBRL format within 30 days from receipt of CRA-3.

This calendar acts as a compliance roadmap, helping companies plan, monitor, and execute cost audit activities without missing critical deadlines.

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How SSCOIndia Simplifies Your Cost Audit Compliance

Cost audit compliance, while mandatory, can be complex and time-consuming without the right expertise and tools. This is where SSCOIndia steps in as your trusted partner, simplifying the entire cost audit journey with expert guidance and technology-driven solutions.

CRA Compliance Calendar Tracker

SSCOIndia provides a comprehensive CRA compliance calendar tracker tailored to your company’s financial year. This intuitive tracker sends timely reminders for every crucial milestone — from cost records maintenance to CRA-4 MCA filing. This proactive monitoring eliminates the risk of missing deadlines and incurring penalties.

End-to-End Filing Support: CRA-2 to CRA-4

Navigating the MCA portal and filing various CRA forms can be daunting. SSCOIndia offers end-to-end filing assistance for CRA-2, CRA-3, and CRA-4, ensuring accurate, timely submissions while strictly adhering to MCA guidelines and the Companies Act, 2013. Our experts handle XBRL tagging for CRA-4, the most technical part of the filing process, to guarantee compliance.

Reconciliation Reports and Audit Assistance

Reconciliation of cost records with financial statements is an essential audit step mandated under CRA-1. SSCOIndia’s skilled professionals assist in preparing reconciliation statements, identifying discrepancies, and ensuring they are properly documented for audit purposes. Our detailed audit assistance helps prevent report rejections and audit queries.

Industry-Ready Templates for CRA-1 Record Maintenance

Different industries have unique cost structures and compliance nuances. SSCOIndia offers industry-specific cost records templates aligned with CRA-1 requirements, making it easier for companies to maintain consistent and audit-ready records throughout the year. Automated formats and checklists simplify internal reviews and data entry.

Why Choose SSCOIndia?

• Proven expertise in cost audit compliance for diverse sectors

• Dedicated support for MCA filings and audit documentation

• Cost-effective packages tailored to company size and industry

• Ensures compliance with latest amendments and MCA notifications

By partnering with SSCOIndia, companies transform a traditionally cumbersome process into a seamless, hassle-free compliance experience.

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Conclusion & Call to Action (CTA)

In conclusion, timely and systematic planning of cost audit compliance is not just a regulatory mandate but a strategic business practice. Maintaining an up-to-date compliance calendar, ensuring prompt board approvals, auditor appointments, and MCA filings safeguard your company from costly penalties, audit red flags, and operational disruptions.

The CRA-1 to CRA-4 compliance calendar acts as a trusted blueprint for Indian companies to meet their statutory cost audit obligations without stress. However, given the technicalities involved, expert assistance is invaluable.

📥 CTA: Schedule Your CRA Compliance Planning Session with SSCOIndia Now!

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