{"id":51363,"date":"2019-08-17T19:00:10","date_gmt":"2019-08-17T13:30:10","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?p=51363"},"modified":"2019-08-19T16:42:39","modified_gmt":"2019-08-19T11:12:39","slug":"7-pm-making-csr-work-on-companies-act-amendments-17th-august-2019","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/7-pm-making-csr-work-on-companies-act-amendments-17th-august-2019\/","title":{"rendered":"7 PM | Making CSR work: On Companies Act amendments | 17th August, 2019"},"content":{"rendered":"\n<p><strong>Context:\n<\/strong>Corporate\nSocial Responsibility or CSR was first encouraged as a voluntary contribution\nby business. Six years ago it evolved into a co-option of the corporate sector\nto promote inclusiveness in society and now with the amendments in Companies\nAct 2013, CSR has become an imposition.<\/p>\n\n\n\n<p><strong>More\nin news: <\/strong>The\npanel headed by Corporate Affairs Secretary Injeti Srinivas presented\nthe&nbsp;\u2018Report of the High Level Committee on CSR\u2019&nbsp;to the Union\nMinister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman on 13th\nAugust 2019.<\/p>\n\n\n\n<p><strong>Corporate\nSocial Responsibility (CSR):<\/strong><\/p>\n\n\n\n<p>Corporate Social Responsibility is\ndefined as the voluntary integration of companie\u2019s social and ecological\nconcerns into their business activities and their relationships with their\nstakeholders.&nbsp;Being socially responsible means not only fully satisfying\nthe applicable legal obligations but also going beyond and investing \u2018more\u2019 in\nhuman capital, the environment, and stakeholder relations.<\/p>\n\n\n\n<p><strong>The\nCompanies (Amendment) Bill, 2019 and CSR:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The\nCompanies (Amendment) Bill, 2019 which amends the Companies Act, 2013 was\npassed in monsoon session have made non-compliance with CSR norms a jailable offence.<\/li><li>Under\nthe Act, if companies which have to provide for CSR, do not fully spent the\nfunds, they must disclose the reasons for non-spending in their annual\nreport.&nbsp; However, under the Bill, any unspent annual CSR funds must be\ntransferred to one of the funds under Schedule 7 of the Act (e.g., PM Relief\nFund) within six months of the financial year.<\/li><li>Any\nviolation may attract a fine between Rs 50,000 and Rs 25,00,000 and every\ndefaulting officer may be punished with imprisonment of up to three years or fine\nbetween Rs 50,000 and Rs 25,00,000, or both.&nbsp;<\/li><li>Under\nthe provision of bill,&nbsp;if the\nCSR funds are committed to certain ongoing projects, then the unspent funds\nwill have to be transferred to an Unspent CSR Account within 30 days of the end\nof the financial year, and spent within three years.&nbsp;<\/li><\/ul>\n\n\n\n<p><strong>The\nHigh Level Committee on CSR:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The High Level Committee on CSR was constituted in October, 2018 under the Chairmanship of Secretary (Corporate Affairs) to review the existing CSR framework and make recommendations on strengthening the CSR ecosystem, including monitoring implementation and evaluation of outcomes.\u00a0<\/li><li>The main recommendations\u00a0 are:<ul><li>making CSR expenditure tax deductible<\/li><li>provision for carry forward of unspent balance for a period of 3 \u2013 5 years<\/li><li>aligning Schedule 7 with the SDGs by adopting a SDG plus framework (which would additionally include sports promotion, Senior Citizens\u2019\u00a0 welfare, welfare of differently abled persons, disaster management and heritage protection<\/li><li>balancing local area preferences with national priorities<\/li><li>introducing impact assessment studies for CSR obligation of 5 crore or more<\/li><li>Registration of implementation agencies on MCA portal.\u00a0 <\/li><li>developing a CSR exchange portal to connect contributors, beneficiaries and agencies,<\/li><li>allowing CSR in social benefit bonds<\/li><li>Promoting social impact companies, and third party assessment of major CSR projects.<\/li><\/ul><\/li><li>The Committee has emphasized on not treating CSR as a means of resource gap funding for government schemes.\u00a0 <\/li><li>The Committee discourages passive contribution of CSR into different funds included in Schedule VII of the Act.\u00a0 <\/li><li>It has emphasized on CSR spending as a board driven process to provide innovative technology based solutions for social problems.\u00a0 <\/li><li>The Committee has also recommended that companies having CSR prescribed amount below Rs. 50 lakh may be exempted from constituting a CSR Committee.\u00a0 <\/li><li>The Committee has also recommended that violation of CSR compliance may be made a civil offence and shifted to the penalty regime.<\/li><\/ul>\n\n\n\n<p><strong>Conclusion:\n<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>CSR\nis a means to partner corporates for social development and such penal\nprovisions are not in harmony with the spirit of CSR. <\/li><li>CSR\nshould not be treated as another tax on businesses. <\/li><li>Non-compliance\nby corporates should be decriminalized and made a civil offence.<\/li><\/ul>\n\n\n\n<p><strong>Source:\n<\/strong><a href=\"https:\/\/www.thehindu.com\/opinion\/editorial\/making-csr-work\/article29112880.ece\">https:\/\/www.thehindu.com\/opinion\/editorial\/making-csr-work\/article29112880.ece<\/a><strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Corporate Social Responsibility or CSR was first encouraged as a voluntary contribution by business. Six years ago it evolved into a co-option of the corporate sector to promote inclusiveness in society and now with the amendments in Companies Act 2013, CSR has become an imposition. More in news: The panel headed by Corporate Affairs&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/7-pm-making-csr-work-on-companies-act-amendments-17th-august-2019\/\">Continue reading <span class=\"screen-reader-text\">7 PM | Making CSR work: On Companies Act amendments | 17th August, 2019<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130],"tags":[],"class_list":["post-51363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2019\/07\/7-PM.png?fit=1000%2C500&ssl=1","views":{"total":0,"cached_at":1700783340,"cached_date":1704783645},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51363"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51363\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49370"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=51363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=51363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}