MCA vide General Circular No. 15 /2020 dated 10th April, 2020 has provided a set of FAQs along with clarifications in regards to eligibility of CSR expenditure related to COVID-19 activities, which are as follows-
- Whether contribution made to ‘PM CARES Fund’ and ‘State Disaster Management Authority’ to combat COVID19 shall qualify as CSR expenditure? -Yes. Under item no (viii) and (xii) of Schedule VII of the Companies Act, 2013 respectively.
- Whether contribution made to ‘Chief Minister’s Relief Funds’ or ‘State Relief Fund for COVID-19’ shall qualify as CSR expenditure? -No as it is not included in Schedule VII of Companies Act, 2013.
- Whether spending of CSR funds for COVID-19 related activities shall qualify as CSR expenditure? -CSR funds may be spent for various activities related to COVID-19 under items nos. (i) and (xii) of Schedule VII of Companies Act, 2013.
- Whether payment of salary/wages to employees and workers, including contract labour, during the lockdown period (including imposition of other social distancing requirements) can be adjusted against the CSR expenditure of the companies? -Payment of salary/ wages to employees and workers during the lockdown period is a moral obligation of the employers, as they have no alternative source of employment or livelihood during this period.
- Whether payment of wages made to casual /daily wage workers during the lockdown period can be adjusted against the CSR expenditure of the companies? -No as it is a 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.
- Whether payment of ex-gratia to temporary /casual /daily wage workers shall qualify as CSR expenditure? -If it is paid over and above the disbursement of wages, specifically for the purpose of fighting COVID 19 as a onetime exception provided there is an explicit declaration to that effect by the Board of the company, which is duly certified by the statutory auditor.
The said Circular can be accessed through the following link: MCA_Circular 15_10.04.2020_FAQs on CSR