Also, payments made to temporary and daily wage workers during the lockdown period would not be counted as CSR as such payments are a part of “moral, humanitarian and contractual obligations of the company”, the MCA said.
It said any ex-gratia payment made to daily wage earners specifically for the purpose of fighting Covid-19 over and above the disbursement of wages would be allowed as CSR expenditure as a one-time exception. This, provided there is an explicit declaration to that effect by the board, duly certified by the statutory auditor.
On March 28, the government had announced PM CARES Fund to deal with the Covid-19 pandemic and any other such emergencies that may arise in future. The fund was declared an eligible activity under CSR of companies.
The schedule VII provides for setting up a fund by the central government for socio-economic development and relief which would be counted as CSR expenditure, an MCA notification said.
On March 23, the government had said contributions towards fighting the coronavirus
pandemic will be treated as CSR activity.