Exemption from Cost Audit Orders

Exemption from Cost Audit Orders:-


Even though there is no provision in the Companies Act, 1956 for grant of year-to-year exemption
from Cost Audit, the exemption from Cost Audit on year-to-year basis is granted by Cost Audit
Branch in situations arising out of temporary closure of the company and/or its manufacturing
facilities, negligible production/activity, etc. These exemptions are based on logic that exemptions
can be accorded by the executive since the cost audit orders are also issued by the executive.

 Applications for seeking exemption are required to be made to the Central Government, along with
fee, as prescribed above for appointment of Cost Auditor. Following documents are required to be
furnished along with application for exemption:
• Printed or attested true copy of complete Annual Report containing balance sheet and profit
  and loss account for the year for which exemption is being sought along with copies of the
  same pertaining to preceding two years. In case, exemption is being sought in the beginning
   of the financial year, the printed or attested true copy of Complete Annual Report for last
  three years may be provided.
• An affi davit containing full facts of capacity utilization, turnover and fi nancial status of the
  company such as sick or not or such other grounds on the basis of which exemption is being
  sought, duly signed by two Directors of the company and authenticated by a Notary Public.
• A brief note/status report on steps taken by the management for revival of the company and/
  or the said unit.