New CSR levy: A quasi tax

The approach to push companies, which do not see a business case for CSR, to invest in CSR activities is against the spirit of CSR

The law that requires large companies (net worth Rs 500 crore or more, or turnover Rs 1,000 crore or more) and profitable companies (net profit of Rs 5 crore or more) to spend 2 per cent of average pre-tax profit of previous three years on CSR activities listed in Schedule VII, which was introduced in 2014, was amended on August 1, 2019. Earlier, disclosure of information on CSR policy, spending, etc, was mandatory. The amendment has made the spending of 2 per cent of net profit on CSR activities mandatory and failure to spend the amount a punishable offence. 

A non-compliant