Companies spending funds on COVID vaccination for individuals other than employees and their families will be considered as a CSR expenditure. The corporate affairs ministry, which is implementing the Companies Act, 2013, has issued a clarification in this regard.
In March 2020, the ministry had said that spending on COVID-19 would be considered as a Corporate Social Responsibility (CSR) activity. "... it is further clarified that spending of CSR funds for COVID-19 vaccination for persons other than the employees and their families, is an eligible CSR activity," the ministry said in a circular on July 30.
The activity is eligible to be considered as a CSR work under Section VII of the Act relating to promotion of healthcare, including preventive healthcare and pertaining to disaster management. "The companies may undertake the aforesaid activity subject to fulfillment of Companies (CSR Policy) Rules, 2014 and the circulars related to CSR issued by this ministry from time to time," the circular said.
Under the Act, certain class of profitable companies are required to spend at least two per cent of their three-year average net profit towards CSR activities in a particular financial year.