Cost Audit › Penalties
Cost Audit Penalties: What Non-Compliance Actually Costs
Missed CRA-2 filings, late CRA-4 submissions, or skipped cost records don't just risk a notice — they carry real, escalating costs under the Companies Act. Here is what's actually at stake.
Overview
What Penalties Apply for Cost Audit Non-Compliance?
Non-compliance with cost record maintenance, cost auditor appointment, or CRA filing obligations under Section 148 of the Companies Act can expose both the company and its officers to penalty, read together with the general penalty provision under Section 450. Separately, late filing of Form CRA-4 attracts its own additional fee that increases with the length of delay and carries no upper cap — making genuinely late filings far costlier than an on-time one, however small the original oversight.
Who Needs This
Who Should Review Their Penalty Exposure
Companies with a missed CRA filing
Companies unsure of applicability
Directors and company secretaries
Foreign companies with India filings
Where the Cost Comes From
The Two Sources of Cost Audit Penalty Risk
Section 148 read with Section 450
General penalty provision covering the company and every officer in default
CRA-4 Late Filing Fee
A daily additional fee applied for delayed filing of the cost audit report
Officer-level liability is real, not theoretical
Penalty provisions under the Companies Act apply to "officers in default" individually, not just the company as an entity — which typically includes the CFO, company secretary and relevant board members depending on their role in the lapse.
Why It Matters
Why a Penalty Risk Review Is Worth Doing
Catch gaps before they compound
A missed CRA-2 this year can cascade into CRA-3/CRA-4 issues next year.
Stop the daily fee clock
Every day of CRA-4 delay adds to an uncapped fee — early action limits the damage.
Protect individual officers
Directors and CS staff get clarity on their personal exposure, not just the company's.
Documented remediation plan
A clear path to compliance is easier to present to the board than silence.
Root-cause identification
We identify why a lapse happened, not just patch the immediate filing gap.
Prevent repeat lapses
Process fixes reduce the chance of the same gap recurring next year.
How It Works
Our Process for a Penalty Risk Review
A calm, structured path from identifying exposure to closing it out.
Start My Risk ReviewCompliance history review
We check your filing history for CRA-2, CRA-3 and CRA-4 across recent years.
Exposure assessment
Any gaps are assessed against Section 148 and Section 450 penalty provisions.
Remediation plan
A prioritized plan addresses the most time-sensitive exposure first.
Filing catch-up
Outstanding filings are prepared and submitted as quickly as compliant.
Process fix going forward
We help build internal checkpoints to prevent recurrence.
Before You Start
Documents We Review for a Penalty Assessment
Prior CRA-2/CRA-3/CRA-4 filings
Financial statements, last 2–3 years
Board resolutions on auditor appointment
Any MCA correspondence or notices received
Sector Coverage
Industries We Serve
Why SSCOIndia
Why Choose SSCOIndia for a Penalty Risk Review
ICMAI Cost Accountants
Written compliance position
Fast, no-obligation review
PAN India, foreign entities too
Questions
Frequently Asked Questions
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