The contributions and donations to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) will now be considered as corporate social responsibility (CSR) spend for the companies.
The government has included the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) in the list of activities prescribed for companies to fulfill their mandatory corporate social responsibility (CSR) spend.
The Ministry of Corporate Affairs (MCA) via a notification dated May 26 has included PM CARES Fund in Schedule VII of the Companies Act, 2013 along with ‘the Prime Minister’s National Relief Fund’. The changes are made with a retrospective effect.
“In Schedule VII, item (viii), after the words "Prime Minister's National Relief Fund", the words - or Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund shall be inserted” a Corporate Affairs notification dated May 26 said.
This notification shall be deemed to have come into force on March 28, 2020, according to the ministry notification.
The government had earlier set up PM CARES Fund as a public charitable trust for dealing with distress economic situations such as posed by the outbreak of COVID-19.
The Prime Minister is the ex-officio Chairman of the PM CARES Fund, and Minister of Defence, Minister of Home Affairs and Minister of Finance are ex-officio trustees of the Fund.
Welcoming the decision of corporate affairs ministry, Madhu Sudan Kankani, Partner, Deloitte India said, "With the inclusion of PM Cares Fund under schedule VII of the Companies Act, contributions made to this fund now qualify as eligible spend by the Companies for their CSR spend requirements.""Vide an office memorandum issued by MCA dated March 28 2020, the MCA had indicated that contribution to PM Cares Fund, are in the nature of donations already prescribed under schedule VII and therefor qualify as eligible CSR expenditure. However, without the amendment to the Companies Act, there was in-clarity on this provision. With the amendment, made effective from 28 March 2020, now, the Companies will be able to consider the donations they made to PM Cares Fund as their CSR expenditure and meet their CSR compliances. There are many companies who have made donations to PM Cares fund given the COVID 19 pandemic," he added.