Section 9 in The Companies (Cost records and audit) Rules, 2014
9. Transportation Cost.-
(a)Proper records shall be maintained for recording the actual cost of transportation showing each element of cost such as freight, cartage, transit insurance and others after adjustment for recovery of transportation cost. Abnormal costs relating to transportation, if any, are to be identified and recorded for exclusion of computation of average transportation cost.(b)In case of a manufacturer having his own transport fleet, proper records shall be maintained to determine the actual operating cost of vehicles showing details of various elements of cost such as salaries and wages of driver, cleaners and others, cost of fuel, lubricant grease, amortized cost of tyres and battery, repairs and maintenance, depreciation of the vehicles, distance covered and trips made, goods hauled and transported to the depot.(c)In case of hired transport charges incurred for despatch of goods, complete details shall be recorded as to date of despatch, type of transport used, description of the goods, destination of buyer, name of consignee, challan number, quantity of goods in terms of weight or volume, distance involved, amount paid and other related details.(d)Records shall be maintained separately for inward and outward transportation cost specifying the details particulars of goods despatched, name of supplier or recipient, amount of freight etc.(e)Separate records shall be maintained for identification of transportation cost towards inward movement of material (procurement) and transportation cost of outward movement of goods removed or sold for both home consumption and export.(f)Records for transportation cost from factory to depot and thereafter shall be maintained separately.(g)Records for transportation cost for carrying any material or product to job-workers place and back shall be maintained separately so as include the same in the transaction value of the product.(h)Records for transportation cost for goods involved exclusively for trading activities shall be maintained separately and the same shall not be included for claiming any deduction for calculating assessable value excisable goods cleared for home consumption.(i)Records of transportation cost directly allocable to a particular category of products shall be maintained separately so that allocation can be made.(j)For common transportation cost both for own fleet or hired ones, proper records for basis of apportionment shall be maintained.(k)[ Records for transportation costs for exempted goods, taxable goods cleared for export shall be maintained separately.] [Substituted by Notification No. G.S.R. 792(E), dated 15.10.2019 (w.e.f. 30.6.2014).](l)Separate records of cost for mode of transportation other than road like ship or air are to be maintained, which shall be included in total cost of transportation.(m)Inward transportation costs shall form the part of the cost of procurement of materials which are to be identified for proper allocation or apportionment to the materials or products.(n)Outward transportation cost shall form the part of the cost of sale and shall be allocated or apportioned to the materials and goods on a suitable basis.(o)The following basis shall be used, in order of priority, for apportionment of outward transportation cost depending upon the nature of products, unit of measurement followed and type of transport used, namely :-i) Weight;ii) Volume of goods;iii) Tonne-Km;iv) Unit or Equivalent unit;v) Value of goods;vi) Per cent. of usage of space.(p)Once a basis of apportionment is adopted, the same shall be followed consistently.(q)For determining the transportation cost per unit, distance shall be factored in to arrive at weighted average cost.(r)Abnormal and non-recurring cost shall not be a part of transportation cost.
