CLARIFICATIONS FROM MINISTRY OF CORPORATE AFFAIRS (MCA) TOWARDS CORPORATE SOCIAL RESPONSIBILITY (CSR) – Eshwars
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CLARIFICATIONS FROM MINISTRY OF CORPORATE AFFAIRS (MCA) TOWARDS CORPORATE SOCIAL RESPONSIBILITY (CSR)

Authored by Adit N Bhuva

BACKGROUND:

MCA vide its general circular dated 18th June 2014, had clarified that the activities undertaken by the company under its CSR policy should be relatable to Schedule VII of Companies Act 2013, and that the entries in Schedule VII should be interpreted liberally in order to capture the essence of the items in the said schedule.

On account of pandemic, MCA vide its circular dated 23rd March, 2020 had further gone ahead to clarify that spending of CSR funds for Covid-19 is an eligible CSR activity under item I (promoting health care including preventive health care) and item XII (disaster management) of Schedule VII.

In addition to the above, MCA has clarified that the following activities related to COVID to be categorised as an expenditure under CSR.

AMOUNT SPENT ON FOLLOWING ACTIVITIES TO BE CLASSIFIED UNDER CSR ACTIVITY:

Circular dated 22nd April 2021

(a) Any amount spent on setting up makeshift hospitals and temporary COVID Care facilities shall be treated as an eligible CSR activity (Companies may undertake such activities in consultation with State Government).

Circular dated 05th May 2021

(a) any amount spent for:

1. creating health infrastructure for COVID care

2. establishment of medical oxygen generation and storage plants

3. manufacturing and supply of oxygen concentrators, ventilators, cylinders, and

4. other medical equipment for countering COVID-19.

MCA further clarified that the companies including Government companies may undertake the activities or projects or programmes using CSR funds, directly by themselves or in collaboration as shared responsibility with other companies.

CLARIFICATION ON CONTRIBUTION TO PM CARES FUND:

MCA vide Circular dated 20th May 2021, has clarified that if a company has contributed any amount to

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