Covid-19 related FAQs on eligible CSR expenditure/ activities
April 13, 2021
The MCA has released FAQs providing clarification on the eligibility of CSR expenditure related to COVID-19 activities, as follows:
All contributions to PM CARES Fund, State Disaster Management Authority and COVID-19 related activities under items (i) and (xii) of Schedule VII of the Companies Act 2013 relating to promotion of health care including preventive health care and sanitation and disaster management will qualify as CSR expenditure;
Contributions to Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19’ will not qualify as admissible CSR expenditure as they are not included in Schedule VII;
Payment of salary/wages to employees and workers, including contract workers, during the lockdown period shall not qualify as admissible CSR expenditure. Such payment in normal circumstances is a contractual and statutory obligation of the company, while during the lockdown period is a moral obligation of the employers.
Payment of wages to temporary, casual and daily wage workers cannot be adjusted and will not count towards CSR expenditure. Such payment is applicable to all companies irrespective of whether they have any legal obligation for CSR contribution under section 135 of the Companies Act 2013.
However, any ex-gratia payment made to temporary / casual workers/ daily wage workers, over and above the disbursement of wages, specifically for the purpose of fighting COVID 19, is admissible as CSR expenditure as a onetime exception, provided there is an explicit declaration to that effect by the Board of the company duly certified by the statutory auditor.
To refer to the FAQs, dated 10 April 2020, click here.
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