Donations to CM relief fund cannot be counted as CSR - MCA
PrintListen to this Article
0:00
0:00
MCA has clarified that companies cannot make financial contributions to any ‘Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19′ and claim that as ‘corporate social responsibility’ (CSR) spending as per existing law.
This clarification comes less than two weeks after the ministry of corporate affairs (MCA) said all corporate donations to Modi’s ‘PM CARES Fund’, which was set up to fight the COVID-19 pandemic, could be counted as CSR expenditure that most companies are mandated to make by law.
Instead, corporates will have to donate to a state government’s disaster management authority in order to claim it as CSR spending.
It appears that in the last few weeks, the MCA and finance ministry both received a number of requests over whether donations to ‘Chief Minister’s Relief Fund’ also would count as CSR spending. However, as per existing law, this is not allowed.
“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,” an FAQ issued by the ministry noted.
The circular added, however, that corporate contributions made to each individual ‘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”. #casansaar (Source - MCA, Tweet Fm)
This clarification comes less than two weeks after the ministry of corporate affairs (MCA) said all corporate donations to Modi’s ‘PM CARES Fund’, which was set up to fight the COVID-19 pandemic, could be counted as CSR expenditure that most companies are mandated to make by law.
Instead, corporates will have to donate to a state government’s disaster management authority in order to claim it as CSR spending.
It appears that in the last few weeks, the MCA and finance ministry both received a number of requests over whether donations to ‘Chief Minister’s Relief Fund’ also would count as CSR spending. However, as per existing law, this is not allowed.
“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,” an FAQ issued by the ministry noted.
The circular added, however, that corporate contributions made to each individual ‘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”. #casansaar (Source - MCA, Tweet Fm)
Category : Corporate Law | Comments : 0 | Hits : 395
Ashneer Grover, former managing director of BharatPe, has moved the National Company Law Tribunal (NCLT), Delhi, alleging opression and mismanagement at the company. The case came up for hearing on...
Over 96,000 companies have wound up their operations in the past five years, according to the Ministry of Corporate Affairs. Businesses opt for winding up for various reasons, including financial u...
Three board members of Ed tech company Byju’s resigned on Thursday, June 22. According to reports, Peak XV Partners' GV Ravishankar, Prosus' Russell Dreisenstock and Chan Zuckerberg Init...
Comments