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TMI BlogReal Estate/Construction Industry: Reconfirmation of Applicability of Cost Accounting Record Rules 2011X X X X Extracts X X X X X X X X Extracts X X X X ..... Real Estate/Construction Industry: Reconfirmation of Applicability of Cost Accounting Record Rules 2011 - By: - ajay singh - Corporate Laws / IBC / SEBI - Dated:- 12-6-2012 - - Real Estate/Construction Industry: Reconfirmation of Applicability of Cost Accounting Record Rules 2011 by Ministry of Corporate Affairs The present article is in continuation of our earlier article on applicability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Cost Accounting Record Rules. The Construction/real estate was very much within the ambit of CARR-2011. since the issue of CARR-2011 on 3rd June 2011 w.e.f Apr-11. However, some doubts were raised from certain quarters regarding the applicability of Cost Accounting Record Rules 2011 on Real Estate/Construction Industry. Ministry of Corporate Affairs issued clarification vide no 52/CAB/ on 25th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May 2012 which states: The matter has been once again examined in the Ministry and it has been decided that there appear no reasons for granting any special exemption to the construction (incl development or Real Estate) Industry from the applicability of the Companies (Cost Accounting Records) Rules 2011. It means that the Real Estate Companies/Construction/Developers have to prepare the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records for the year 2011-12 and file the Compliance Report with Ministry of Corporate Affairs. The clarification further mentions that any of the following companies shall have to comply with CARR-2011: a. Companies undertaking jobs with the use of own materials. b. Companies engaged in development of residential, commercial or industrial Estates i.e. development of township, residential u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nits, commercial complex, office blocks, industrial parks Iincluding SEZ) etc. c. Companies engaged in construction of highways, rails, roads, bridges, industrial and non industrial structures, or other infrastructure facilities etc. d. Companies engaged in construction activities undertaken under BOT/BOOT mode, e. Companies engaged in the projects undertaken as EPC contractor. Even if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company incorporated in India has undertaken projects abroad, the CARR- 2011 will be applicable. Please note the word etc at the end of few explanations above. The clarification seems to be inclusive and other related activities are also covered. Exemption has been provided to contractors wherein they are paid only conversion charges and they do not use any of their own material. CARR 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 do not apply to non-corporate entities or companies not falling under applicability condition given below: Now, that all the companies engaged in the Construction and/or development (real estate) businesses and fulfill any one of the following criteria have to maintain Cost Records, obtain a report from the Cost Accountants, Approve the report along with annexures from the board of directors a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd file the Report with the Ministry of Corporate Affairs. Applicability Clause: a. The aggregate value of net worth as on the last date of the immediately preceding financial year exceeds five crores of rupees; or b. Wherein the aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds twenty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores of rupees; or c. Wherein the company s equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India. Please note that the report has to be filed within one hundred and eighty days from the close of the company s financial year to which the compliance report relates. The summarized provisions for the year 2011-12 onward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are: a. The cost records are required to be kept on regular basis in such manner so as to make it possible to calculate per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities for every financial year on monthly/quarterly/half-yearly/annual basis. b. The Cost Records should be prepared in compliance of Cost Accounting Standards and G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enerally Accepted Cost Accounting Principles c. All such cost records and cost statements need to be be reconciled with the audited financial statements for the financial year specifically indicating expenses or incomes not considered in the cost records or statements so as to ensure accuracy and to reconcile the profit of all product groups with the overall profit of the company. All the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory auditors of Real Estate Companies must take care while reporting in CARO with regard to the applicability of Section 209(1)(d). From the year they have to mention that Section 209(1)(d) is applicable on Real Estate / Construction Companies. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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