New Delhi – The government has accelerated the implementation of a high-level committee’s report on Corporate Social Responsibility (CSR) that suggested the violations to be treated as civil offences liable to monetary penalties, Economic Times reported.
Injeti Srinivas, the panel head by corporate affairs secretary, has suggested the government to classify offences under CSR provisions as civil breaches, attracting monetary fines.
Finance and corporate affairs minister, Nirmala Sitharaman has given a clear direction on this and the centre would soon take necessary steps, Economic Times reported quoting government official.
It has already been decided for not operationalising just-amended Companies Act section that specifically prescribes jail terms for CSR violations.
It has also favoured offering tax deductions for CSR spending and carry-forward of unspent balances for three-to-five years.
Tax deductions may not immediately be available as the corporate affairs ministry will have to initiate consultations with the finance ministry, the publication further reported.
However, the government is likely to push the suggestions.
The committee was set up in October 2018 to review the CSR framework and to suggest measures to strengthen the CSR ecosystem, including monitoring, implementation and evaluation of outcomes.
All companies with a net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more are required to spend 2% of their average profit of the previous three years on CSR activities every year. The mandatory CSR provision was introduced in the 2013 Companies Act.
The panel has also suggested bringing banks and limited liability partnerships (LLP) under the mandatory CSR expenditure framework and batted for inclusion of sports promotion, senior citizens’ welfare, welfare of differently abled people, disaster management, and heritage protection as permitted activities.