A refractory company wants to setup a Solar power plant for its captive use under CSR activities. The company is not engaged in any kind of power generation as of now.
Will such a Renewable Energy project be eligible under CSR?
6 Replies
Jatin Bajaj
(CS)
(2930 Points)
Replied 19 April 2016
Refer Schedule vii which states the CSR Activities of the Companies. Schedule 7 points out the list of CSR Activities
CA Vibhor Kalamkar
(Partner at Bhojwani Kalamkar & Co.)
(186 Points)
Replied 24 May 2016
Can the Solar power plant be covered under Clause (vi) 'Ensuring environmental sustainability'
Jatin Bajaj
(CS)
(2930 Points)
Replied 24 May 2016
Environmental Sustainability–Essence of Schedule VII includes ensuring environmental sustainability, ecological balance, protection of flora and fauna, conservation of natural resources, and maintaining the quality of soil, air and water. Companies which help in generation of renewable energy like solar/ wind and water tend to save natural resources like hydro carbon/ fossil fuel aiding ecological balance which is one of the areas covered by Schedule VII. Cost of setting up renewable energy for captive consumption and/ or the cost of procuring renewable energy which leads to conservation of fossil fuels / hydro carbonsshould be considered as CSR provided thatsuch spends are for renewable energy consuming companies and not for companies whoare in the business of production or distribution of such renewable energy for sale in the ordinary course oftheir business.
This means that above activity under schedule VII of Companies Act 2013, Provided that such amount not be used by Companies if their ordinary business fall under this.
Hope this will benifit you.
CA Vibhor Kalamkar
(Partner at Bhojwani Kalamkar & Co.)
(186 Points)
Replied 28 June 2016
Thank you for the reply. Information you provided is very useful.
Mandar
(Associate)
(561 Points)
Replied 28 June 2016
Kindly refer to GENERAL CIRCULAR NO.21/2014 [F.NO.05/01/2014-CSR], DATED 18-6-2014 SI No. 16 wherein Renewable energy projects are been covered under 'Environmental sustainability, ecological balance and conservation of natural resources',
CA Vibhor Kalamkar
(Partner at Bhojwani Kalamkar & Co.)
(186 Points)
Replied 28 June 2016
Mr. Jatin is there any circular or any clarification issued by the ministry that supports your explanation. The management of the company needs some proof for their satisfaction.
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