MCA Extends the Last Date for Filing Cost Audit Report by Companies

MCA issued a circular on Tuesday, MCA Circular No.38/2020, which provides a further extension in the last day for filing the form of cost audit report, i.e. CRA-4 by the companies. The last date for submitting the cost audit report by the cost auditor to the companies is now extended till 31st December 2020. This circular grants relaxation of additional fees and provides for an extension on the date of filing CRA-4 by the companies for the financial year 2019-20. 

The MCA had granted an extension in the last date for the filing of the form of cost audit report through a circular issued by MCA, MCA Circular No.29/2020 on 10th September 2020. MCA gave the extension to file CRA-4 for the financial year 2019-20 considering the present pandemic situation in the country. This circular stated that if the cost auditor submits the cost audit report to the company by 30th November 2020, then it will not be considered as a violation of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014.

Every company to which the Companies (Cost Records and Audit) Rules apply, must get their cost records audited from a cost auditor. The cost auditor needs to prepare the cost audit report, and forward it to the Board of Directors of the company. Rule 6(5) of the Companies (Cost Records and Audit) Rules states that the cost auditor should prepare the cost audit report and provide it to the company within 180 days from the closure of the financial year. 

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Thus, for the financial year 2019-20, companies needed to obtain the cost audit report prepared by the cost auditor within 30th September 2020 as per Rule 6(5). Taking into consideration the present COVID-19 situation in the country, the MCA initially granted time to obtain the cost audit report from the cost auditor by 30th November 2020, thus giving two months extra time to the cost auditor and the companies for preparing and filing CRA-4.

The Rule 6(6) of the Companies (Cost Records and Audit) Rules states that after obtaining the cost audit report from the cost auditor, the companies need to file the cost audit report in Form CRA-4 to the Central Government. Thus, with the MCA circular of September granting the grace period of two months, the companies could file e-form CRA-4 within 31st December 2020 to the Central Government for the financial year 2019-20.

Subsequently, the MCA through the circular issued on Tuesday granted a grace period of extra one month to the companies for obtaining the cost audit report from the cost auditor. As per the circular, the cost auditor can now forward the cost audit report to the companies within 31st December 2020 for the financial year 2019-20. Thus, the companies can now file e-form CRA-4 within 31st January 2020 without attracting any penalty. MCA has given this extension in the date of filing CRA-4 due to the various representations received from the stakeholders of the companies of large scale disruption caused to them by COVID-19.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in

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