Fighting Covid-19: Donations to CM fund won't qualify as CSR, says MCA

Ex-gratia payments to workers will be treated as CSR, provided these are over and above wages

Companies can’t claim contributions made to the Chief Minister’s Relief Fund or the State Relief Fund for Covid-19 as corporate social responsibility (CSR) spending, the Ministry of Corporate Affairs (MCA) has said.
 

These funds are not part of the Schedule VII of the Act that enumerates eligible funds under CSR, it said.
 

Also, payments made to temporary and daily wage workers during the lockdown period would not be counted as CSR as such payments are a part of “moral, humanitarian and contractual obligations of the company”, the MCA said.
 

It said any ex-gratia payment made to daily wage earners specifically for the purpose of fighting Covid-19 over and above the disbursement of wages would be allowed as CSR expenditure as a one-time exception. This, provided there is an explicit declaration to that effect by the board, duly certified by the statutory auditor.
 

On March 28, the government had announced PM CARES Fund to deal with the Covid-19 pandemic and any other such emergencies that may arise in future. The fund was declared an eligible activity under CSR of companies.
 

The schedule VII provides for setting up a fund by the central government for socio-economic development and relief which would be counted as CSR expenditure, an MCA notification said.
 

On March 23, the government had said contributions towards fighting the coronavirus pandemic will be treated as CSR activity.