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Cost Records Maintenance Under Section 148: What You Actually Need to Track
Cost record maintenance is the first threshold under the cost audit rules — and often the one companies discover too late they've already crossed. Here is what has to be tracked, and from when.
Overview
What Are Statutory Cost Records?
Cost records are the detailed accounting of material, labour, overhead and other costs attributable to a company's products or services, maintained in the format prescribed by Form CRA-1 under Rule 5 of the Companies (Cost Records and Audit) Rules, 2014. Any company in a Rule 3 sector with overall turnover of ₹35 crore or more in the preceding financial year must maintain these records — well before the higher cost audit thresholds are even relevant.
Who Needs This
Who Must Maintain Cost Records
Companies crossing ₹35cr turnover
Manufacturing companies
Regulated-sector companies
Foreign companies manufacturing in India
What Gets Recorded
The Core Elements of Cost Records
Material & Labour Costs
Direct material consumption and labour allocated to each product/service
Overheads & Utilities
Factory overheads, utilities and depreciation allocated on a consistent basis
Records ≠ audit
Maintaining cost records does not automatically mean you need a cost audit — that only applies once the separate, higher Rule 4 turnover thresholds are also crossed. Many companies maintain records for years before audit ever applies.
Why It Matters
Why Proper Cost Records Matter
Statutory compliance
Meets the Rule 5 requirement before any audit obligation even arises.
Audit-ready from day one
Well-maintained records make a future cost audit far faster and cheaper.
Real cost visibility
Product-wise costing shows margins your general ledger alone won't.
Better inventory control
Consistent cost tracking improves inventory valuation accuracy.
Pricing decisions
Accurate per-unit cost data supports sharper pricing and quotes.
Inspection-ready
Records can be called for by the Central Government at any time.
How It Works
How We Set Up Your Cost Records
From a records gap assessment to an ongoing CRA-1 compliant system.
Start My Records SetupApplicability check
We confirm whether Rule 3 and the ₹35 crore threshold apply to your company.
Gap assessment
Existing cost accounting practices are reviewed against the CRA-1 format.
System design
We design a cost record structure mapped to your products, plants and cost centres.
Implementation support
Your finance team is guided through capturing costs in the required format.
Ongoing review
Periodic checks keep records consistent and audit-ready year to year.
Before You Start
Documents We Review to Set Up Records
Financial statements
Production & inventory data
Purchase data
Labour cost records
Sector Coverage
Industries We Serve
Why SSCOIndia
Why Choose SSCOIndia for Cost Records
ICMAI Cost Accountants
Written compliance position
Fast, no-obligation review
PAN India, foreign entities too
Questions
Frequently Asked Questions
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