Ministry of Corporate Affairs issues clarifications on eligibility of CSR expenditure for COVID 19
1. Payment of salary/wages to employees and workers, including contract labour, during the lockdown period cannot be adjusted against the CSR expenditure of the companies as it is a part of statutory/contractual obligation of an employer. It is also a moral obligation of the employers, as they have no alternative source of employment or livelihood during this period.
2. Payment of wages made to casual /daily wage workers during the lockdown period cannot be adjusted against the CSR expenditure of the companies. Payment of wages to temporary or casual or daily wage workers during the lockdown period is part of the moral/ humanitarian/ contractual obligations of the company and is applicable to all companies irrespective of whether they have any legal obligation for CSR contribution under section 135 of the Companies Act 2013.
3. If any ex-gratia payment is made to temporary / casual workers/ daily wage workers over and above the disbursement of wages, specifically for the purpose of fighting COVID 19, the same shall be admissible towards CSR expenditure as a one-time exception provided there is an explicit declaration to that effect by the Board of the company, which is duly certified by the statutory auditor.