Claton Ltd., a Mumbai based company, started a make shift hospital in Mumbai suburbs to provide temporary Covid care facilities, which include creating health infrastructure for Covid care, establishment of medical oxyge

CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2022
Claton Ltd., a Mumbai based company, started a make shift hospital in Mumbai suburbs to provide temporary Covid care facilities, which include creating health infrastructure for Covid care, establishment of medical oxygen plants etc. Can these expenditures qualify for Corporate Social Responsibility (CSR) spending? What are the government guidelines in this regard ?

Answer & Explanation:

The General Circular No. 10/2020 dated March 23, 2020 issued by the Ministry of Corporate Affairs (MCA), clarified that spending of CSR funds for various activities related to COVID-19 is an eligible CSR activity. Further, setting up of make shift hospitals and temporary COVID care facilities are legible CSR activity under item no. (i) and (xii) of the schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care/sanitisation and disaster management. The MCA has clarified that board based items as mentioned under schedule VII may be interpreted liberally, therefore spending of CSR funds for creating health infrastructure for COVID care, establishment of medical oxygen generation and storage, manufacturing and supply of oxygen concentrators, ventilators, cylinders and other medical equipment's for countering COVID-19 or similar such activities are eligible CSR activities under schedule VII of the Companies Act, 2013. Hence, Claton Ltd. can undertake the aforesaid activities in consultation with State Government subject to fulfillment of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the circulars issued by MCA from time to time.

Topics: Corporate Social Responsibility (CSR)

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