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Succumbing to pressure from several quarters, the government has assured to review the controversial penal provisions in the latest amendments to the Companies Act for defaults on Corporate Social Responsibility or CSR norms. The move to review the amendment came in less than two week's time of the amendment making its way through Parliaent.
According to Confederation of Indian Industry ( CII) statement , the Finance Minister Nirmala Sitharaman has assured businessmen at a closed door interaction on Friday. The Minister also said that she would travel around the country to find out whether businesses are being harassed by tax officials.
"Sitharaman mentioned that she would review the provision on criminal penal provisions. She said CSR notices with retrospective effect ‘were unacceptable’ and she will put a stop to these notices," said the statement.
A large number of Corporates were upset with the Companies (Amendment) Bill 2019, signed into law by the President on 31 July. The new law proposed that any unspent annual CSR funds should be transferred to a specified government fund within six months of the financial year. In the case of ongoing CSR projects, businesses have three years to utilise the funds allocated in a given year. The law also proposed penal provisions that may include fine or imprisonment or both for defaulting officers.