CSR compliance is not a mandate for every company. The burden of compliance rests only with those who meet either or all of the following conditions during the immediately proceeding financial year:
| Parameter | Condition |
| Net Worth | >= 500 Crore |
| Turnover | >= 1,000 Crore |
| Net Profit | >= 5 Crore |
For the above purpose, spending on which activities qualifies as CSR expenditure has been enumerated in Schedule VII.
As per general circular no. 21/2014 dated 18.6.14, the activities mentioned in Schedule VII must be interpreted liberally in order to capture the essence of the subjects provided in the said schedule. They should be seen as broad headings that are supposed to cover vide range of activities. In the light of the same, general circular no. 10/2020 dated 23.3.20 provided that the amount spent by businesses in relation to covid related activities should also amount to CSR expenditure, provided the same falls under the categories provided in schedule VII.
If we refer to Schedule VII, entry (i) provides for activity relating to “eradicating hunger, poverty and malnutrition, promotion prevention health care and sanitation including contribution to the Swach Bharat Kosh set up by the Central Government for the promotion of sanitation and making available safe drinking water“. Further, entry (xii) reads as activity relating to ” Disaster management, including relief, rehabilitation and reconstruction activities“.
The circular no. 13/2021 dated 30.07.2021 has cited these two entries in order to clarify that covid related expenditure does fall within the scope of CSR Spending. However, it is has been clarified that the same holds true as long as the expenditure is not incurred in relation to own employees and their families.
Thus, any measure undertaken to protect the employees against covid or to look after covid affected employees will NOT be eligible as CSR-related expenditure.
