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Ministry of Corporate Affairs, Government of India has clarified that a contribution made to ‘PM CARES Fund’ shall qualify as CSR expenditure under Item No viii of Schedule VII of the Companies Act, 2013.
However, any contribution to the 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.
Nonetheless, contribution to State Disaster Management Authority to combat COVID-19 will qualify as CSR expenditure, MCA has added.
The clarifications are part of set of FAQs released by MCA on April 10.
MCA has reiterated that spending CSR funds for COVID-19 related activities shall qualify as CSR expenditure.
It is further informed that since payment of salary/ wages to employees or temporary/casual/daily wage workers during the lockdown period is a moral obligation of the employers, the same shall not qualify as admissible CSR expenditure.
Subject to an explicit declaration by the Board of the company, which is also duly certified by the statutory auditor, if any ex-gratia payment is made to temporary/casual/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 an one-time exception, MCA has added.
Read the FAQs: