RS Ltd. has incurred ₹5 lakh for the fulfillment of Labour Law, Land Acquisition Act and Food Safety & Standards Act in the month of May, 2018. The company has accounted for this ₹5 lakh as Corporate Social Responsib
CS Executive · Company Law · PYQS · June 2018
RS Ltd. has incurred ₹5 lakh for the fulfillment of Labour Law, Land Acquisition Act and Food Safety & Standards Act in the month of May, 2018. The company has accounted for this ₹5 lakh as Corporate Social Responsibility (CSR) expenditure. Explaining the provisions of the Companies Act, 2013 discuss whether the company has rightly accounted for the amount in CSR.
Answer & Explanation:
According to the provisions of section 135 of the Companies Act, 2013 and rules and clarifications thereunder, expenses incurred by companies for the fulfillment of any Act/ Statute of regulations (such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure under Companies Act, 2013. In accordance with the aforementioned clarification, expenditure of ₹5 lacs relating to fulfillment of requirement under Labour law, Land Acquisition Act and Food Safety and Standard Act by RS Ltd., will not be treated as CSR expenditure.
Topics: Corporate Social Responsibility (CSR)
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