Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Cost of Production for Captive Consumption

CAS - 04 - Rule - Companies Law - CAS - 04 - CAS - 4 The following is the text of the COST ACCOUNTING STANDARD 4 (CAS-4) issued by the Council of the Institute of Cost and Works Accountants of India on "". The standard deals with determination of . In this Standard, the standard portions have been set in bold italic type. These should be read in the context of the background material which has been set in normal type. Introduction 1. The Cost Accounting principle for determination of c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce from the place of manufacture even if such removal does not amount to sale. Assessable value of goods used for captive consumption is based on cost of production. According to the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, the assessable value of goods used for captive consumption is 115% (110% w.e.f. 5-8-2003) of cost of production of such goods, and as may be prescribed by the Government from time to time. 2. Objective 2.1 The purpose of this standard .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing the cost of production to arrive at an assessable value of excisable goods used for captive consumption. 3.2 Cost of production will include various cost components. They are already defined in Cost Accounting Standard-1 ('Classification of Cost' - CAS-1). Thus, this standard has to be read in conjunction with CAS-1. 4. Definitions 4.1 Cost of Production - Cost of production shall consist of Material Consumed, Direct Wages and Salaries, Direct Expenses, Works Overheads, Quality Contr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or manufacturing another product(s). 4.3 Normal Capacity is the production achieved or achievable on an average over a period or season under normal circumstances taking into account the loss of capacity resulting from planned maintenance. (CAS-2) Determination of 5. To determine the , calculations of different cost components and adjustments are explained below: 5.1 Material Consumed - Material Consumed shall include materials directly identified for production of goods such as : (a) indigenous .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar duties subsequently recovered/recoverable by the enterprise shall also be deducted. 5.2 Direct wages and salaries - Direct wages and salaries shall include house rent allowance, overtime and incentive payments made to employees directly engaged in the manufacturing activities. Direct wages and salaries include fringe benefits such as: (i) Contribution to provident fund and ESIS (ii) Bonus/ ex gratia payment to employees (iii) Provision for retirement benefits such as gratuity and superannuati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eam etc. (ii) Royalty based on production (iii) Technical Assistance/know-how fees (iv) Amortized cost of moulds, patterns, patents etc. (v) Job charges (vi) Hire charges for tools and equipment (vii) Charges for a particular product designing etc. 5.4 Works Overheads - Works overheads are the indirect costs incurred in the production process. Works overheads include the following expenses: (i) Consumable stores and spares (ii) Depreciation of plant and machinery, factory building etc. (iii) Lea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

control cost is the expenses incurred relating to quality control activities for adhering to quality standard. These expenses shall include salaries & wages relating to employees engaged in quality control activity and other related expenses. 5.6 Research and Development Cost - The research and development cost incurred for development and improvement of the process or the existing product shall be included in the cost of production. 5.7 Administrative Overheads - Administrative overheads n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng shall be included. Packing cost includes both cost of primary and secondary packing required for transfer/dispatch of the goods used for captive consumption. 5.9 Absorption of overheads - Overheads shall be analysed into variable overheads and fixed overheads. Variable Overheads are the items which change with the change in volume of production, such as cost of utilities etc. Fixed overheads are the items whose value do not change with the change in volume of production such as salaries, rent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds - Stock of work-in-progress shall be valued at cost on the basis of stages of completion as per the cost accounting principles. Similarly, stock of finished goods shall be valued at cost. Opening and closing stock of work-in-progress shall be adjusted for calculation of cost of goods produced and similarly opening and closing stock of finished goods shall be adjusted for calculation of goods despatched. In case the cost of a shorter period is to be determined, where the figures of opening and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uct. For allocation of joint cost to joint products, the sales values of products at the split off point i.e., when the products become separately identifiable may become the basis. Some other basis may be adopted. For example, in case of petroleum products, each product is assigned certain value based on its certain properties, may be calorific value and these values become the basis of apportionment of joint cost among petroleum products. 5.12 Treatment of Scrap and Waste - The production proc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s. Stage Input material cost Processing cost Total (Rs./ MT) (Rs./MT) (Rs./MT) 1 2,000 500 2,500 2 2,500 1,000 3,500 3 3,500 1,000 4,500 If during the production process at stage 3, the scrap is produced and the same is recycled at stage 2 after making an expenditure of ₹ 200 per MT to make it suitable for re-processing at stage2, then scrap will be valued @ Rs. (2,500 - 200) i.e., ₹ 2,300. If no expenditure is involved to make scrap re-usable, the scrap value will be @ ₹ 2,500 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

irect or indirect nature, including packing material is supplied free of cost by the user of the captive product, the landed cost of such material shall be included in the cost of production. 5.15 Moulds, Tools, Dies & Patterns etc. received free of cost - The amortization cost of such items shall be included in the cost of production. 5.16 Interest and financial charges - Interest and financial charges being a financial charge shall not be considered to be a part of cost of production. 5.17 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Appendix - 1 or as near thereto as possible. The manufacturer will be required to maintain cost records and other books of account in a manner, which would facilitate preparation and verification of the cost of production. For manufacturers covered under the ambit of section 209(1)(d) of the Companies Act, 1956, i.e., where Cost Accounting Records are statutorily required to be maintained, the Cost Accountant certifying the shall verify the correctness of the cost from these records. However, f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ii) If opening stock and closing stock of work -in-progress and finished goods are not readily available for certification purpose, the same should be disclosed. Appendix - 1 Name of the Manufacturer : Address of the Manufacturer : Registration No. of Manufacturer : Description of product captively consumed: Excise Tariff Heading : Statement of Cost of Production of-manufactured / to be manufactured during the period- Qty. Q.1 Quantity Produced (Unit of Measure) Q.2 Quantity Despatched (Unit of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- 12 + 13) 15. Add: Inputs received free of cost 16. Add: Amortised cost of Moulds, Tools, Dies & Patterns etc. received free of cost 17. Cost of Production for goods produced for captive consumption (14 + 15 + 16) 18. Add : Opening stock of finished goods 19. Less : Closing stock of finished goods 20. Cost of production for goods despatched (17 + 18 - 19) Seal & Signature of Company's Authorised Representative I/We, have verified above data on test check basis with reference to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version