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Introduction : How and when to appoint a cost auditor using CRA-2

In today’s era of growing regulatory oversight, cost audit compliance has become a non-negotiable responsibility for many Indian companies. While statutory audits and GST audits often get the spotlight, cost audits play a critical role in evaluating operational efficiency, production costs, and resource utilization—making them equally vital from a corporate governance and MCA compliance standpoint.

But where does the cost audit journey actually begin?
It begins with CRA-2 – the formal appointment of a cost auditor.

Filing CRA-2 with the Ministry of Corporate Affairs (MCA) marks the first mandatory step in the cost audit lifecycle. Without this, a company cannot legally proceed to conduct a cost audit or file subsequent forms like CRA-3 (Cost Audit Report) and CRA-4 (Final Submission). Missing this first step doesn’t just delay the audit—it may also invite heavy penalties and scrutiny from regulatory authorities.

This guide is especially relevant for:

  • Companies engaged in regulated sectors such as manufacturing, pharmaceuticals, telecom, energy, or infrastructure.

  • Businesses with annual turnover exceeding ₹100 crores, falling under cost audit applicability as per CRA-1.

  • CFOs, compliance officers, and cost accountants looking to avoid MCA penalties and streamline audit workflows for FY 2024–25.

Whether you're appointing a cost auditor for the first time or reappointing one, understanding CRA-2 is crucial. Let’s begin by decoding what CRA-2 actually is and why it’s so important under Indian corporate law.

What is CRA-2?

CRA-2 is an electronic form prescribed by the Ministry of Corporate Affairs (MCA) under the Companies (Cost Records and Audit) Rules, 2014. Its full title is “Notice of appointment of cost auditor by the company to Central Government.” Simply put, this is the form used to inform the MCA about who your company has appointed as its cost auditor for the current financial year.

✅ Legal Foundation

CRA-2 derives its legal authority from Section 148(3) of the Companies Act, 2013, read with Rule 6(2) of the Companies (Cost Records and Audit) Rules. According to this provision:

“Every company required to conduct a cost audit shall appoint a cost auditor within 180 days of the commencement of the financial year and shall inform the Central Government of such appointment.”

This notification to the Central Government is what CRA-2 accomplishes. Failing to file it on time means your company is in breach of statutory compliance, making the entire audit process technically invalid.

✅ Purpose and Function

Here’s why CRA-2 is absolutely critical:

  • 📌 First Legal Step in the Cost Audit Lifecycle
    It formalizes the cost auditor’s appointment and sets the foundation for CRA-3 (Cost Audit Report) and CRA-4 (Final Submission) later in the year.

  • 📌 Evidence of Board Approval
    CRA-2 includes board resolution details and auditor consent, ensuring the MCA knows the appointment was made through proper governance channels.

  • 📌 Regulatory Trail
    It creates a compliance trail for your company’s cost audit process and can be requested by regulators or lenders during scrutiny.

  • 📌 Linked to Penalty Provisions
    Failure to file CRA-2 can attract penalties up to ₹100 per day, and any cost audit report filed thereafter may be considered invalid.

🛑 Don’t Confuse CRA-2 with CRA-1

CRA-1 refers to the maintenance of cost records. CRA-2 is the filing of auditor appointment, CRA-3 is the report, and CRA-4 is the submission to MCA.

📢 Pro Tip: Many companies make the mistake of focusing on CRA-3 and CRA-4, but forget CRA-2 is the gatekeeper. If CRA-2 is not filed within 180 days of the start of the financial year (usually by 27th September for FY 2024–25), you may face compliance risks and audit disruptions.

Who Needs to File CRA-2?

The requirement to file CRA-2 is not universal—it applies specifically to companies mandated by Indian law to undergo cost audit. But who exactly falls into this category?

📌 Companies Required to Maintain Cost Records

Under Rule 3 and Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, certain companies must maintain detailed cost accounting records and have their costs audited. These rules specify:

  • Which companies must maintain cost records?
    Any company engaged in the manufacture, production, processing, or mining of specified goods or services.

  • When is cost audit mandatory?
    When the company’s turnover exceeds prescribed thresholds or when it operates in certain regulated industries.

📌 Key Sectors Impacted

Cost audit—and by extension, CRA-2 filing—is particularly applicable to companies in:

  • Manufacturing industries producing goods like cement, steel, chemicals, textiles, automobiles, and FMCG products.

  • Electricity generation and distribution companies, including thermal, hydro, and renewable energy producers.

  • Pharmaceuticals and healthcare product manufacturers.

  • Telecommunications service providers.

  • Infrastructure and construction firms.

  • Select mining and mineral extraction companies.

These sectors are subject to scrutiny because of their economic importance and scale of operations, making cost control and transparency vital.

📌 Turnover Threshold and Criteria

The primary financial benchmark triggering cost audit applicability is an annual turnover exceeding ₹100 crore. However, the MCA can prescribe sector-specific thresholds or additional conditions for companies in strategic industries.

For example:

  • A textile company with turnover above ₹100 crore is liable.

  • A telecom company must comply regardless of turnover, based on service area.

  • Electricity firms with a minimum installed capacity or revenue also fall under the rules.

📌 Who Else Needs to File?

  • Companies that have already filed CRA-1 (Maintenance of Cost Records) and are required to appoint a cost auditor.

  • Companies who intend to file CRA-3 (Cost Audit Report) for FY 2024–25 must first file CRA-2 to legitimize the auditor’s appointment.

Why It Matters

Filing CRA-2 is not just a regulatory checkbox; it formalizes the company’s commitment to cost audit compliance. Without CRA-2, the MCA will not recognize your appointed auditor, invalidating subsequent audit reports and potentially inviting legal penalties.

CRA-2 Due Date for FY 2024–25

Timely filing of CRA-2 is crucial to maintaining compliance and avoiding penalties. The Companies Act and Cost Audit Rules specify clear timelines that every applicable company must follow.

📅 Filing Deadline: Within 180 Days from Start of Financial Year

For FY 2024–25, the financial year starts on 1st April 2024. Hence, the CRA-2 form must be filed on or before 27th September 2024 (180 days later).

This deadline is non-negotiable. Filing after this date risks penalties and disrupts the entire cost audit process, affecting subsequent filings of CRA-3 and CRA-4.

📅 Why This Timeline?

  • It allows the MCA to acknowledge the appointment and maintain a record of your cost auditor.

  • Ensures enough time for the auditor to conduct the cost audit within prescribed timeframes.

  • Provides a compliance trail to show that the company is on top of its regulatory duties.

⚠️ Late Filing Penalties

  • Under Section 99(2) of the Companies Act, 2013, late filing of CRA-2 attracts a penalty of ₹100 per day of delay.

  • There is no maximum cap on the penalty, meaning prolonged delay can lead to hefty fines.

  • Besides financial penalties, late filing can cause the MCA to reject subsequent CRA-3 and CRA-4 filings, placing the company in a non-compliant status.

📢 Pro Tip: Appoint Your Cost Auditor Early

  • Don’t wait until the last moment to appoint your cost auditor. Early appointment gives you buffer time to handle any unforeseen issues.

  • Early CRA-2 filing enables timely CRA-3 (Cost Audit Report) and CRA-4 (Final Submission) filings.

  • Avoid last-minute compliance rushes that increase the risk of errors, incomplete documentation, or missing deadlines.

📅 Summary Table for FY 2024–25 CRA-2 Timeline

Activity Timeline/Deadline
Start of Financial Year (FY 24-25) 1st April 2024
CRA-2 Filing Deadline 27th September 2024 (180 days)
Consequence of Late Filing ₹100 per day penalty (No cap)

By understanding who must file CRA-2 and by when, companies can take proactive steps to ensure seamless cost audit compliance in 2024–25.

Documents & Details Required to File CRA-2

Filing CRA-2 is a critical step in the cost audit process, and having the right documents ready can save you time and prevent costly errors. Below is the detailed checklist of essential documents and information you’ll need before starting your CRA-2 filing:

📄 1. Cost Auditor’s Consent Letter

The very first document required is the consent letter from the appointed cost auditor. This letter serves as official confirmation that the auditor agrees to accept the appointment and perform the cost audit as per regulatory requirements.

  • It must be signed by the cost auditor and clearly mention the audit period and scope of work.

  • This document protects the company by ensuring the auditor is aware and has accepted their responsibility.

📄 2. Board Resolution for Appointment of Cost Auditor

Next, the company’s board of directors must pass a resolution approving the appointment of the cost auditor. This resolution:

  • States the name and membership number of the auditor being appointed.

  • Confirms that the appointment complies with relevant Companies Act and Cost Audit Rules.

  • Must be signed by the company secretary or authorized personnel.

Without a proper board resolution, your CRA-2 filing may be rejected by MCA, causing delays and compliance issues.

📄 3. PAN & Membership Number of the Cost Auditor

You will need the Permanent Account Number (PAN) and the membership number issued by the Institute of Cost Accountants of India (ICMAI) of the appointed auditor.

  • These details help MCA uniquely identify the auditor.

  • Double-check these numbers carefully to avoid errors in filing.

📄 4. SRN of Previous Year’s CRA-2 (If Reappointing the Same Auditor)

If your company is reappointing the same cost auditor for consecutive years, you will need the Service Request Number (SRN) from last year’s CRA-2 filing.

  • This acts as a reference and streamlines the MCA’s validation process.

  • Helps avoid duplication or rejection in the portal.

Additional Tips:

  • Ensure all documents are legible, signed, and up to date.

  • Keep soft copies ready in PDF format for easy upload during the filing.

  • Verify that the auditor’s consent and board resolution cover the correct financial year (FY 2024–25 for current filings).

Step-by-Step CRA-2 Filing Process on MCA Portal

Now that you have your documents ready, here’s a clear, easy-to-follow process to file CRA-2 online via the Ministry of Corporate Affairs (MCA) portal:

Step 1: Log in to MCA Portal

  • Visit the official MCA website: www.mca.gov.in.

  • Log in using your company’s user ID and password.

  • If you don’t have an account, you must first register as a company user to access filing services.

Step 2: Download CRA-2 e-Form

  • Navigate to the ‘MCA Services’ tab.

  • Under the ‘E-Forms’ section, select CRA-2 (Appointment of Cost Auditor).

  • Download the form for offline filling, or choose to fill it online directly on the portal.

Step 3: Fill Company & Auditor Details

  • Enter the company’s CIN (Corporate Identification Number), financial year, and audit period.

  • Fill in the details of the appointed cost auditor, including:

    • Name

    • Membership number (ICMAI)

    • PAN number

    • Address and contact details

  • Mention if the auditor is a reappointment, and provide the previous SRN if applicable.

Step 4: Attach Mandatory Documents

  • Upload the cost auditor’s consent letter in PDF format.

  • Upload the board resolution approving the appointment.

  • Ensure files are clear and conform to the MCA’s prescribed size and format.

Step 5: Digital Signature by Director and Cost Auditor

  • The CRA-2 form must be digitally signed by:

    • At least one director of the company, holding a valid Digital Signature Certificate (DSC).

    • The appointed cost auditor, also with a valid DSC.

Note: Digital signatures ensure authenticity and prevent unauthorized filings. If you don’t have a DSC, you can obtain it from certified agencies.

Step 6: Pre-Scrutiny and Submission

  • After filling and attaching all documents, run the pre-scrutiny check available on the portal.

  • This will highlight any errors or missing fields that must be corrected.

  • Once the form passes scrutiny, submit it online.

Step 7: SRN Generation and Acknowledgment

  • Upon successful submission, the MCA portal will generate a Service Request Number (SRN).

  • The SRN is your proof of filing and should be saved or printed for your records.

  • MCA will review the form, and once accepted, your cost auditor’s appointment will be officially recorded.

Pro Tips for a Smooth Filing Experience:

  • Use a reliable internet connection to avoid interruptions during filing.

  • Double-check all fields before submission to prevent rejection.

  • Maintain a copy of all submitted documents and acknowledgments.

  • If you face issues, MCA’s helpdesk and FAQs offer support for common problems.

Summary

Filing CRA-2 might seem complex at first, but breaking it down step-by-step simplifies the process immensely. With all required documents ready and a clear action plan, your company can comply smoothly with the cost audit regulations for FY 2024–25.

Penalties for Non-Filing or Delayed CRA-2

Delaying or ignoring CRA-2 filing is not a trivial mistake—it can derail your entire cost audit compliance schedule. The Ministry of Corporate Affairs (MCA) has strict enforcement guidelines when it comes to cost audit filings, and CRA-2 is no exception.

🚨 Late Filing Fee: ₹100 Per Day

If your company misses the CRA-2 due date (i.e., within 180 days from the start of the financial year), a late filing fee of ₹100 per day becomes applicable under Rule 6(2) of the Companies (Cost Records and Audit) Rules, 2014.

This penalty accumulates daily and must be paid before the form is accepted by MCA. In many cases, the delay could amount to thousands of rupees, which is entirely avoidable.

🚨 Penalties Under Section 450 of the Companies Act, 2013

If the delay or non-filing continues:

  • The company, every officer in default, and even the cost auditor (in some cases) may be fined under Section 450 of the Companies Act.

  • The fine can go up to ₹10,000, with a further fine of ₹1,000 per day of continued default.

These penalties are in addition to late filing fees, making non-compliance extremely costly and reputationally damaging.

🚨 Downstream Impact: CRA-3 & CRA-4 Blocked

If you haven’t filed CRA-2, the MCA system won’t accept CRA-3 (cost audit report) or CRA-4 (final submission).

This means:

  • Your cost audit process cannot proceed without a valid CRA-2.

  • Even if the cost auditor completes the audit, you cannot legally submit the report.

Expert Tips for Hassle-Free CRA-2 Filing

Filing CRA-2 is simpler when you start early and stay organized. Here are some proven tips to help you file this crucial form without hiccups:

✅ Finalize Cost Auditor Before AGM

Don’t wait until the last minute. Finalizing and appointing a qualified cost auditor well before your AGM gives your team time to:

  • Obtain consent letters

  • Draft board resolutions

  • Complete e-filing without penalty risk

✅ Keep DIN, DSC, and PAN Updated

Many CRA-2 rejections happen due to expired digital signatures (DSCs), inactive DINs, or incorrect PAN details. Before filing:

  • Ensure your Director Identification Number (DIN) is marked ‘active’ on the MCA portal.

  • Renew Digital Signature Certificates for both director and auditor.

  • Cross-check PAN entries for spelling and format.

✅ Validate Form Before Uploading

Use the pre-scrutiny tool available on MCA to validate your CRA-2 form before final upload. This step:

  • Helps identify missing or incorrect fields

  • Prevents last-minute rejections

  • Saves time and money

✅ Ensure Auditor is Not Disqualified (Section 141)

Before appointing the auditor, verify that they are not disqualified under Section 141 of the Companies Act, which lists situations like:

  • Auditor’s involvement in company affairs

  • Holding interest in company shares

  • Conflicts of interest with directors

Ignoring this check can invalidate your CRA-2 filing, leading to legal complications.

How SSCOIndia Helps You Appoint a Cost Auditor Smoothly

Struggling to navigate the CRA-2 process? SSCOIndia.com offers end-to-end cost audit compliance support, helping you meet your regulatory obligations without stress.

🧾 Shortlisting Qualified Cost Auditors

Our team connects you with pre-vetted, experienced cost auditors who meet the requirements under Section 148 and CRA Rules. We consider:

  • Industry-specific experience

  • Availability for the financial year

  • Fee alignment and engagement terms

📄 Drafting Board Resolutions and Consent Letters

We help draft and format:

  • Board Resolutions in proper format for board meetings

  • Consent Letters from the appointed auditor

  • Supporting documents as required by the MCA

All documents are vetted for legal soundness and format compliance with MCA’s scrutiny norms.

🌐 End-to-End MCA E-Form Filing

From login to SRN generation, our experts manage the entire CRA-2 filing process:

  • Form download and fill-up

  • Attachment validation

  • Digital signature management

  • Submission, pre-scrutiny, and error resolution

📅 Create an Audit Calendar for CRA-2 to CRA-4

We go one step further by creating a customized cost audit calendar, helping you manage:

  • CRA-2 (appointment)

  • CRA-3 (report submission)

  • CRA-4 (final MCA upload)

This prevents deadline anxiety and ensures total compliance.

✅ Book Free CRA-2 Consultation

Start your CRA-2 filing today with a free consultation from our cost audit team. We’ll guide you step-by-step and ensure your filing is:

  • Accurate

  • On time

  • Penalty-free

📞 Click here to book now

Conclusion 

Filing CRA-2 is more than just a formality—it’s the first and most important checkpoint in your company’s cost audit compliance journey.

Missing this step can delay CRA-3 and CRA-4 filings, attract penalties, and even risk non-compliance notices from MCA.

But with the right guidance and expert help, you can stay compliant without stress.

✅ Trust SSCOIndia.com to help your company appoint a cost auditor and file CRA-2 with accuracy and speed.

📞 Book your free consultation now and complete your CRA-2 filing ahead of the deadline:
👉 www.sscoindia.com/contact-us

Let SSCOIndia take the cost audit burden off your plate—so you can focus on growing your business with full compliance confidence.

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