Teamlease Education Foundation Report titled “GST Levy on CSR” reveals some key findings related to impact and implication of GST (Goods and Services Tax) on CSR (corporate social responsibility) activities of Indian businesses. CSR has aggressively supported programs that have made it possible to link the vast majority of people in the workforce with organisations that are seeking to close the education gap.

India is the first country to make Corporate Social Responsibility (CSR) mandatory in the world, following an amendment to the Companies Act 2013. Historically, 95 per cent of all businesses believe that the levy of GST on a social good initiative is unjustified.

55 per cent of all CSR contributions come from the manufacturing, automotive, power and energy, and financial services industries. Over the last six years, the contribution from this category has grown at a 14 per cent compound annual growth rate (CAGR). Companies from six important sectors exhibit the same level of contribution in the TeamLease Education Foundation survey, and 14 more sectors also intend to considerably expand their CSR donations.

TeamLease Education Foundation survey Report concludes with some recommendations. The objective of ensuring compliance and growing the overall pool of CSR funds is unlikely to be advanced by the imposition of GST on CSR activities.

The survey respondents believe that the GST levy on CSR needs to be freed of unnecessary and confusing elements that unfairly tip the scales against enterprises, just like with the majority of other tax regimes. Priority should be given to resolving the contentious issue of disallowing input credit in the case of a GST levy on CSR. 

Neeti Sharma, Co-founder and President of TeamLease EdTech - a TeamLease group company focussing on skilling and upskilling of employed and conventional learners, said, ” Levy on GST brings forward a varied perception of Indian businesses. CSR activities are important for a nation's development, but the government needs to find an approach to make it sustainable for India in the long term."