13 October 2021
Company has crossed Rs. 5 cr profit in FY 2018-19, whether the Company is required to spend on CSR Activities for 3 financial years i.e. for FY 2019-20, 2020-21 & 2021-22 ( including this FY). on 2019-20, 2020-21, the profit is below 5 crores . As per the General Circular No. 14 /2021 dt. 25th Aug 2021 of MCA they had issued a FAQ . A company satisfying any of the following criteria during the immediately preceding financial year is required to comply with CSR provisions specified under section 135(1) of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 made thereunder: (i) net worth of rupees five hundred crore or more, or (ii) turnover of rupees one thousand crore or more, or (iii) net profit of rupees five crore or more
As our above three criteria s are not matching , as per the circular of 25th Aug 2021, our auditors says there is no need to provide the CSR expenditure for FY 2020-21.
But as per our company secretaries is the FAQs on CSR as notified on 25th August, 2021 as just the FAQs based on the Act and Rules, these do not override the main section or the Rules.
Further the Rule 3(2) of the CSR Rules is still effective and has not undergone change or is void due to new changes incorporated through CSR Amendment Rules.
so as per CS Company has crossed Rs. 5 cr Turnover in FY 2018-19, hence as per the Rule 3(2) of the CSR Rules, the Company is required to spend on CSR Activities for 3 financial years i.e. for FY 2019-20, 2020-21 & 2021-22 . I am very confused with the different opinions of CA & CS please guide me on this matter