AGovernment-constituted high level panel on Tuesday recommended making expenditure on CSR tax deductible as well as treat non-compliance with CSR requirements a civil offence under the companies law.
Under the Companies Act, 2013, certain classes of profitable entities are required to spend at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) in a particular financial year.
The panel, headed by Corporate Affairs Secretary Injeti Srinivas, has stressed that CSR expenditure should not be treated as a means of resource gap funding for government schemes.
On Tuesday, Srinivas presented the report to Finance and Corporate Affairs Minister Nirmala Sitharaman. Apart from recommending that violation of CSR compliance might be made a civil offence and shifted to the penalty regime, the panel has also pitched for “making CSR expenditure tax deductible”, according to an official release.
Noting that the committee has made far reaching recommendations, the release said the main suggestions include introduction of impact assessment studies for CSR obligation of Rs 5 crore or more, and registration of implementation agencies on the corporate affairs ministry’s portal.
