As per MCA Circular No 21/2014 dated 18-06-2014, few c larifications were issued with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013. As per clause (iv) of the said circular salaries paid to regular CSR staff as well as to volunteers of the companies were qualified as CSR expenditure towards CSR project. The clause (iv) was as under:
“Salaries paid by the companies to regular CSR staff as well as to volunteers of the companies (in proportion to company’s time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure.”
However MCA has now clarified that in view of the notification dated 12-09-2014, the clause (iv) of the circular stands as deleted and therefore s alaries paid by the companies to regular CSR staff as well as to volunteers of the companies now do not qualify as CSR expenditure towards the cost of CSR project.
General Circular No.36/2014
Wing Shastri Bhawan
Subject: Clarification with regard to prov1s1ons of Corporate Social Responsibility (CSR) under section 135 of the Companies Act, 2013
In continuation of the General Circular No . 21 of 2014 dated 18 . 06 . 2014, the following clarifications are hereby i ssued:
(i) Rule 4(6) of the Companies (Corporate Social Responsibility Policy) Rules , 2014 as notified on 27 . 02.2014 has been amended by notification dated 12 . 09 . 2014 ; and
(ii) Consequently , clarification (iv) in General Circular No. 21 of 2014 dated 18 . 06 . 2014, stands omitted.
This issues with the approval of Competent Authority