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CS Professional · CSR and Social Governance · Social Impact Assessment and CSR Audit

Kaveri Steels Ltd is required to undertake impact assessment of its eligible CSR projects. Its total CSR expenditure for the year is Rs 8 crore. What is the maximum amount it can book as impact assessment expenditure towards CSR for that year?

The cap is Rs 50 lakh. The rules allow impact assessment cost to be counted as CSR up to 5% of the year's CSR expenditure or Rs 50 lakh, whichever is higher. Five per cent of Rs 8 crore is Rs 40 lakh, so the higher Rs 50 lakh applies.

  1. ARs 40 lakh, being 5% of the CSR expenditure
  2. BRs 50 lakh, being the higher of 5% of the CSR expenditure and Rs 50 lakhCorrect
  3. CRs 80 lakh, being 10% of the CSR expenditure
  4. DRs 1 crore, being the per-project limit

Explanation

Impact assessment expenditure may be booked as CSR up to 5% of total CSR expenditure for the year or Rs 50 lakh, whichever is higher. Here 5% of Rs 8 crore = Rs 40 lakh, which is less than Rs 50 lakh, so the cap is Rs 50 lakh. Rs 40 lakh ignores the 'whichever is higher' wording.

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