# Maintenance of Cost Records — Section 148(1)

## Power of the Central Government

The Central Government (CG) may, by order, direct that certain classes of companies (engaged in production of specified goods or services) shall include in their books of account particulars relating to the utilisation of:

Material
Labour
Other items of cost

as may be prescribed.

## Prior Approval Requirement

If the company is regulated under a special law administered by another regulatory body (e.g., TRAI, IRDAI), the CG must obtain prior approval of that concerned regulatory body before issuing such an order.

## Rule 3 — Scope of Applicability

Applies to companies engaged in production of goods or rendering of services specified in:

Table	Sector Type	Number of Industries
Table A	Regulated sector	6 industries
Table B	Non-regulated sector	33 industries

## Overall Turnover Threshold for Applicability

A company must maintain cost records only if:

Overall turnover from all its products/services is ₹35 crore or more in the immediately preceding financial year.

## Exemptions

Micro, Small or Medium Enterprises (MSMEs) — exempt. The threshold criterion follows the same definition as adopted under Section 43B of the Income Tax Act (PGBP head).

Worked example

### Example 1

Example: Z Ltd. is in the steel industry (a Table B / non-regulated sector item) with overall turnover of ₹40 crore in FY 2024-25.

→ Z Ltd. must maintain cost records in FY 2025-26 since it crossed the ₹35 crore threshold in the immediately preceding year.

### Example 2

Example: A telecom company (a regulated/Table A sector) with turnover ₹50 crore must maintain cost records; however, before the CG issues any general direction on the cost particulars, it must consult TRAI.

⚠️ Common exam mistakes

Applying the ₹35 crore turnover test on the current year — it is the immediately preceding FY.
Forgetting that MSMEs are exempt even if otherwise covered.
Ignoring the requirement of prior approval from the concerned regulatory body in regulated sectors.

Bare-Act text Section 148(1) · Companies Act, 2013 · click to expand

The Central Government may, by order, in respect of such class of companies engaged in the production of such goods or providing such services as may be prescribed, direct that particulars relating to the utilisation of material or labour or to other items of cost as may be prescribed shall also be included in the books of account kept by that class of companies: Provided that the Central Government shall, before issuing such order in respect of any class of companies regulated under a special Act, consult the regulatory body constituted or established under such special Act.

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Maintenance of Cost Records (Section 148(1))

Worked example

⚠️ Common exam mistakes