The Hindu Business Line : Govt plans to simplify cost accounting record rules

IN a bid to become more corporate friendly, the Ministry of Company Affairs (MCA) is contemplating consolidation and simplification of the existing cost accounting record rules to be maintained by a company.

Commenting on the rationale behind such a move, official sources said, "The Government has been, from time to time, reviewing the rules and making appropriate changes. A need was felt to simplify and consolidate such rules.

"It was noticed that the same company was manufacturing certain items for which different record rules have been notified. This leads to multiplicity of work for the company."

The norms are applicable to every company engaged in the production, processing or manufacturing of products specified under the rules. Of the 47 cost accounting rules, the Ministry has recently superseded three such rules pertaining to chemical industry and notified a single Cost Accounting Records (Chemical Industry) Rules.

According to industry sources, the consolidation of rules may not really cut down on the multiplicity of work as material records need to be maintained for each item. In fact, in today's competitive environment there is a need to review the entire policy for maintenance of cost audit records, industry sources pointed out. Such records give more information to the competitors than required," they emphasised.

The Cost Accounting Records (Chemical Industry) Rules, 2004, which supersedes the earlier Cost Accounting Records Rules for caustic soda, soda ash, and sulphuric acid stipulates that every company in the said industry in each of its financial year has to keep proper books of accounts relating to utilisation of materials, labour and other items of cost insofar as they are applicable to products referred in the rule.

It further states that if the said company is manufacturing any other product or is engaged in other activities, then the particulars relating to utilisation of materials, labour and other items of cost applicable to such other products or activities would not be included in the cost of products referred to in these rules.

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