REQUEST TO PMOs OFFICE AND MCA TO ALLOW CORPORATES TO ENGAGE IN KERALA’S REHABITATION UNDER CSR SCHEME

REQUEST TO PMOs OFFICE AND MCA TO ALLOW CORPORATES TO ENGAGE IN KERALA’S REHABITATION UNDER CSR SCHEME

UNPRECEDENTED FLOOD IN KERALA

Kerala State government  has suffered a loss of Rs 19,512 crore as per initial assessment due to unprecedented floods in Kerala in August 2018.

CSR UNDER UNDER SECTION 135 OF COMPANIES ACT

Presently , corporates in India have to observe compliance under section 135 of the Act as regards to  Corporate Social Responsibility.

Can the CSR expenditure be spent on the activities beyond Schedule VII?

General Circular No. 21/2014 dated June18, 2014 of MCA has clarified that the statutory provision and provisions of CSR Rules, 2014, is to ensure that while activities undertaken in pursuance of the CSR policy must be relatable to Schedule VII of the Companies Act 2013. However, the entries in the said Schedule VII must be interpreted liberally so as to capture the essence of the subjects enumerated in the said Schedule. The items enlisted in the Schedule VII of the Act, are broad-based and are intended to cover a wide range of activities.

GOVERNMENT SHOULD ALLOW TO SPEND THEIR CSR AMOUNT FOR KERALA RELIEF FOR THIS YEAR 2018

There is a condition that a corporate should spend their CSR Amount in and around the neighborhood of their registered office or plant in which they opeate.

Government should allow the Indian Corporate to spend on infrastructure development in Kerala such as building houses who has lost their homes , building roads and other infrastructure developments due to areas affected by recent floods in 2018 for this year only.

GOVERNMENT TO ALLOW CSR SPENDING IN KERALA AS BUSINESS EXPENDITURE

The amount spent by a company towards CSR cannot be claimed as business expenditure. The Finance Act, 2014 provides that any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession.

Government should allow donation of money to a trust by a company be treated as CSR expenditure of the company be recognizing donation to Flood affected Kerala in 2018 ?

General Circular No. 21/2014 of MCA dated June 18, 2014 clarifies that Contribution to Corpus of a Trust/ Society/ Section 8 companies etc. will qualify as CSR expenditure as long as :

(a) the Trust/ Society/ Section 8 company etc. is created exclusively for undertaking CSR activities or

(b) where the corpus is created exclusively for a purpose directly relatable to a subject covered in Schedule VII of the Act

PRESENT ISSUE

Many Corporates across India want to spend their CSR amount for the flood affected Kerala. There is no notification as regards to CSR for rehabilitation of Kerala would fall under CSR activities

Request to PMOs Office and MCA

 We request the PMOs Office and MCA to issue notification compliance under section 135 of the Act in this regard so that corpoates which are desirous of helping Kerala rehabilitation can participate in the mamooth restructure by spending part or full of the CSR amount for rehabilitation of Kerala.