An APPEAL for Contribution:
MCA has issued its Circular
on 29.03.2020 vide ReF. No.
CSR-05/1/2020-CSR-MCA wherein clarification on eligibility of contribution to
PM CARES Fund for CSR activity under item no. (viii) of the Schedule VII of
Companies Act, 2013 was given.
On 22nd March, 2020 (Sunday), finance minister Mrs. Nirmala Sitharaman while addressing
the social media announced that the ministry of corporate affairs (MCA) had
notified that CSR funds can donate to the PM CARES Fund.
Item no. (viii) of the
Schedule VII of the Companies Act, 2013, which enumerates activities that may
be undertaken by companies in discharge of their CSR obligations, inter alia
provides that contribution to any fund set up by the Central Government for
socio-economic development and relief qualifies as CSR expenditure.
[Item No. viii. Contribution to the prime minister’s
national relief fund or any other fund set up by the central govt. for socio
economic development and relief and welfare of the schedule caste, tribes,
other backward classes, minorities and women]
The PM-CARES Fund has been
set up to provide relief to those affected by any kind of emergency or distress
situation. Accordingly, it is clarified that any contribution made to the PM CARES Fund shall qualify as CSR
expenditure under the Companies Act 2013.
The aforesaid clarification wad
issued with the approval of competent authority and signed by Mr. Gyaneshwar Kumar Singh, Joint
Secretary to Govt of India
Appeal from PM Narendra Modi:
The emergency fund was created by Prime Minister Narendra Modi on Saturday after his office received numerous requests from people for donations to support the government in its fight against the impact of Covid-19. "People from all walks of life expressed their desire to donate to India's war against COVID-19," Modi said, adding the fund has been constituted respecting that spirit.
Appealing to citizens to donate generously, PM Modi said, “It
is my appeal to my fellow Indians, kindly contribute to the PM-CARES Fund. This
Fund will also cater to similar distressing situations, if they occur in the
times ahead.”
People can visit www.pmindia.gov.in to make contributions using credit and debit cards,
UPI, net banking and RTGS or NEFT.
From the
post by Mr. Chitranjan Kumar on Business Today, dated 23rd March, 2020 wherein it was posted as:
The
central government has decided to allow India Inc to use their mandatory
corporate social responsibility (CSR) spending on measures to fight COVID-19.
The Finance Minister Nirmala Sitharaman on Monday confirmed that spending of
CSR funds for COVID-19 is eligible CSR activity.
"In
view of the spread of novel coronavirus in India, its declaration as pandemic
by the WHO, and decision of Government of India to treat this as notified
disaster, it is hereby clarified that spending of CSR funds for COVID-19 is
eligible CSR activity," Sitharaman said on Twitter.
"Keeping
in view of the spread of novel Corona Virus (COVID-19) in India, its
declaration as pandemic by the World Health Organisaton (WHO), and decision of
Government of India to treat this as a notified disaster. It is hereby
clarified that spending of CSR funds for COVID-19 is eligible CSR
activity," Ministry of Corporate Affairs notified on Monday.
"Funds
may be spent for various activities related to COVID-19 relating to promotion
of healthcare, including preventive health care and sanitation and disaster
management," it said.
According to the Companies Act, firms with a net worth of Rs 500
crore, or turnover of Rs 1,000 crore or net profit of Rs 5 crore or more, are
required to set aside 2 per cent of their average net profits over the last
three years on corporate social responsibility activities.
The
rules governing the CSR spending norms have been amended to pave the way for
greater investment into activities related to COVID-19, such as promotion of
health care. This will include preventive health care and sanitisation, and
disaster management, as per the proposal approved by the finance ministry.
In wake
of rising cases of coronavirus cases in India, many state governments have
announced lockdowns of various cities to contain the outbreak of the pandemic.
This has severely affected the operations of the companies and is likely to
impact their profitability.
India
has reported as many as 415 confirmed cases of novel coronavirus. Globally,
more than 3.35 lakh confirmed cases of COVID-19 has been reported, while 14,600
people have died so far due to this disease.
PRIMARY OBJECTIVE OF PM
CARES FUND:
To deal with any kind of
emergency or distress situation such as that posed by COVID 19 pandemic.
The Government of India has
set up the Prime Minister’s Citizen Assistance and Relief in Emergency
Situations Fund’ (PM CARES Fund).
Thanks.
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Ravi Garg, ACS
Company Secretary & Compliance Officer
csravi2014@gmail.com
Feel free to contact with us.
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