Eligibility of CSR expenditures made for COVID-19 activities
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MCA has issued FAQs on eligibility of CSR expenditures made for COVID 19 activities.
The Ministry has been receiving
several references/ representations from various stakeholders seeking
clarifications on eligibility of CSR expenditure related to COVID-19 activities. In
this regard, following are the FAQs along with clarifications. These are as
follows. For the ease of simplicity to my readers, viewers, clients, I have
darkened the specific words. All of You will know easily.
See You all in the next blog.
MCA has issued FAQs on eligibility of CSR expenditures made for COVID 19 activities.
General Circular No. 15/2020. F. No. CSR-01/4/2020-CSR-MCA dt. 10.04.2020
Government of India
Ministry of Corporate Affairs
S.
No.
|
Frequently Asked
Questions (FAQs)
|
Reply
|
1
|
Whether
contribution made to ‘PM
CARES Fund’ shall qualify
as CSR
expenditure?
|
Contribution made to ‘PM CARES Fund’ shall qualify as CSR
expenditure under item no (viii) of Schedule VII of the Companies
Act, 2013 and it has been further clarified vide Office memorandum F. No.
CSR-05/1/2020-CSR-MCA
dated 28th
March, 2020.
|
2.
|
Whether contribution made to ‘Chief Minister’s Relief Funds’ or ‘State
Relief Fund for COVID-19’ shall qualify as CSR
expenditure?
|
‘Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19’ is not included in
Schedule VII of the Companies Act,
2013 and therefore any contribution
to such funds shall not qualify as admissible CSR expenditure.
|
3.
|
Whether contribution
made to State Disaster
Management
Authority shall qualify as CSR
expenditure?
|
Contribution made to State Disaster
Management Authority
to combat COVID-19
shall qualify as CSR expenditure under item no
(xii) of
Schedule VII of the 2013 and clarified vide general circular No. 10/2020 dated
23rd March,
2020.
|
4.
|
Whether spending of CSR funds for COVID-19 related activities shall
qualify as CSR expenditure?
|
Ministry vide
general circular No. 10/2020 dated 23rd March, 2020 has clarified that
spending CSR funds for COVID-19 related activities shall qualify as CSR
expenditure. It is further clarified that funds may be spent for
various activities related to COVID-19 under items nos. (i) and (xii) of
Schedule VII relating to promotion of health care including preventive health
care and sanitation, and disaster management. Further, as per general
circular No. 21/2014 dated 18.06.2014, items in Schedule VII are broad based and
may be
interpreted
liberally for this purpose.
|
5.
|
Whether payment of salary/wages to employees and workers, including contract
labour, during the lockdown period can be adjusted against the CSR
expenditure of the companies?
|
Payment of
salary/ wages in normal circumstances is a contractual and
statutory obligation of the company. Similarly, payment of salary/
wages to employees and workers even during the lockdown period is a moral obligation
of the employers, as they have no alternative source of
employment or livelihood during this period. Thus, payment of
salary/ wages to employees and workers during the lockdown period (including
imposition of other social distancing requirements) shall not qualify as
admissible
CSR expenditure.
|
6.
|
Whether payment of wages made to casual
/daily wage
workers during the lockdown period can be
adjusted against the CSR expenditure of the companies?
|
Payment of wages
to temporary or casual or daily wage workers during the
lockdown period is part of the moral/ humanitarian/ contractual
obligations of the company and is applicable
to all companies irrespective of whether they have any legal obligation for
CSR contribution under section 135 of the Companies Act 2013. Hence, payment of
wages to temporary or casual or daily wage workers during the lockdown period shall not count
towards CSR expenditure.
|
7.
|
Whether payment of ex- gratia to temporary /casual
/daily wage
workers shall qualify as CSR expenditure?
|
If any
ex-gratia payment is made to temporary / casual workers/ daily wage workers
over and above the disbursement of wages, specifically for
the purpose of fighting COVID 19, the same shall be admissible
towards CSR expenditure as a one- time exception
provided there is an explicit declaration to that effect by the Board of the
company, which is duly certified by the
statutory auditor.
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