V S S R and Co

Gazette notification issued by MCA - PM CARE eligible for CSR

The Ministry of Corporate Affairs, vide Gazette Notification dated 26th May, 2020, has made the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) eligible to receive contributions from corporate social responsibility (CSR) corpuses of corporates.

Accordingly, changes to the Companies Act has been made vide notification dated May 26, 2020. The change would come into effect retrospectively from 28th March, 2020..

Post this notification, Schedule VII of the Companies Act specifically mentioned that contributions to the PM CARES Fund would count towards a company's CSR obligations.

The government had also previously clarified that contributions to Chief Minister's Relief Fund and State Relief Fund for coronavirus cannot be claimed as CSR spending by companies.



The text of the MCA Notification dated 26.05.2020, is reproduced below for your information:



G.S.R. 313(E) In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following further amendment to Schedule VII of the said Act, namely:—



In Schedule VII, item (viii), after the words “Prime Minister’s National Relief Fund”, the words “or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)” shall be inserted.
This notification shall be deemed to have come into force on 28th March, 2020.


Note : The Schedule VII was brought into force with effect from the 1st April, 2014 and was amended (effective from the 1st April, 2014) vide notification number G.S.R. 130(E), dated the 27th February, 2014, Corrigenda number G.S.R. 261(E), dated the 31st March, 2014, notification number G.S.R. 568(E), dated the 6th August, 2014, notification number G.S.R. 741(E), dated the 24th October, 2014, notification number G.S.R. 390(E), dated the 30th May, 2019, notification number G.S.R. 776(E), dated the 11th October, 2019 and Corrigenda number G.S.R. 859(E), dated the 19th November,2019

CBDT revising IT Return forms due to COVID 19

The Ministry of Corporate Affairs has received several references/ representations from stakeholders seeking clarifications on the eligibility of CSR expenditure related to Covid 19 activities.

The Ministry has issued a General Circular No. 15/2020, dated 10.04.2020, in clarification of the queries raised by the stakeholders.

In this regard a set of FAQs and clarifications on the same has been issued by the MCA, is given below for the intimation.

General Circular No. 15 /2020

F. No. CSR-01/4/2020-CSR-MCA

Government of India

Ministry of Corporate Affairs

10th April, 2020

COVID-19 related Frequently Asked Questions (FAQs) on
Corporate Social Responsibility (CSR)


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, a set of FAQs along with clarifications are provided below for better understanding of the stakeholders:



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.


This issues with the approval of competent authority.



(Shobhit Srivastava)

Deputy Director,