COVID-19 related FAQ on CSR

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

General Circular No. 15 /2020

No. CSR-01/4/2020-CSR-MCA
Government of India
Ministry of Corporate Affairs

10th April, 2020

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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
1Whether 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.
2Whether 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.
3Whether 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.
4Whether 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.
5Whether 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.
6Whether 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 s hal l not
count towards CSR expenditure.
7Whether 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, MCA

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