CSR Spending only in Nearby/ Local Area where Company Operates: MCA Clarification

CSR Spending only in Nearby/ Local Area where Company Operates: MCA Clarification

MCA has issued a General Circular/ Clarification that the CSR Spending has to be made preferably in the nearby/ local area only, where the company operates, for compliance of provisions under section 135(5) of the Companies Act, 2013, as under:

CSR Spending in Local Area only: MCA Clarification General Circular No. 06/2018 dt. 28 May 2018

1. I am directed to say that concerns have been raised by some stakeholders regarding non-compliance of the first proviso to sub-section (5) of section 135 of the Companies Act, 2013, which lays down that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities.

2. It is reiterated that the above provision has to be followed in letter and spirit.

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