INTRODUCTION & PURPOSE
The Ministry of Corporate Affairs (MCA) has announced new Corporate Social Responsibility (CSR) rules which shall be known as Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. As per the new provisions, every entity that intends to undertake any CSR activity will have to register itself with the Central Government by filing the form CSR-1 electronically with the Registrar of Companies, with effect from April 1, 2021.
This is a fresh introduction. The template of the e-Form is present in the rules. Also, this would mean that entities will not be hired as implementing agencies to carry any CSR Activity until they register themselves with MCA in the Form CSR-1 as mentioned above.
This will further help the Companies to identify the entities involved in the CSR activities on behalf of other companies and also enhance the transparency.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Corporate Social Responsibility (CSR)” means the activities undertaken by a Company in pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the provisions contained in applicable rules, but shall not include the following, namely:-
(i) activities are undertaken in pursuance of the normal course of business of the company:
Provided that any company engaged in research and development activity of new vaccine,
drugs and medical devices in their normal course of business may undertake research and
development activity of new vaccine, drugs, and medical devices related to COVID-19 for
financial years 2020-21, 2021-22, 2022-23 subject to the conditions that
(a) such research and development activities shall be carried out in collaboration with any of the institutes or organizations mentioned in item (ix) of Schedule VII to the Act;
(b) details of such activity shall be disclosed separately in the Annual report on CSR included in the Board’s Report;
(ii) any activity is undertaken by the company outside India except for training of Indian sports
personnel representing any State or Union territory at the national level or India at international level;
(iii) contribution of any amount directly or indirectly to any political party under section 182 of the Act;
(iv) activities benefitting employees of the company as defined in clause (k) of section 2 of the Code on Wages, 2019 (29 of 2019);
(v) activities supported by the companies on a sponsorship basis for deriving marketing benefits for its products or services;
(vi) activities carried out for fulfillment of any other statutory obligations under any law in force in India;
ENTITIES THAT CAN CARRY CSR ACTIVITIES AND WHO ARE REQUIRED TO FILE FORM CSR-1:
The Board of a Company may decide to undertake its CSR activities approved by the CSR Committee, through
- a company established under section 8 of the Act or
a registered trust or
a registered society,
registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or
- a company established under section 8 of the Act or
a registered trust or
a registered society,
established by the Central Government or State Government or
- any entity established under an Act of Parliament or a State legislature or
- a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.
Entities who are required to file FORM CSR-1
- Every entity, as mentioned above, which has been incorporated for carrying the CSR activity (other than the Company itself), shall register itself with the Central Government by filing the form CSR-1 electronically with the Registrar, with effect from the 01st day of April 2021.
- This shall not affect the CSR projects or programs approved prior to the 01st day of April 2021.
- Form CSR-1 shall be signed and submitted electronically by the entity and shall be verified digitally by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice.
- On the submission of the Form CSR-1 on the portal, a unique CSR Registration Number shall be generated by the system automatically.
Thank you. post your query on rajnikant@rmpsco.com
