Intro:
The Ministry of Corporate Affairs (MCA) has amended the Companies (CSR Policy) Rules, 2014 to introduce Form CSR-1, a mandatory filing for all implementing agencies. This move brings greater transparency and accountability in corporate social responsibility (CSR) spending across India.
What is Form CSR-1?
Form CSR-1 is an e-form notified by the MCA for NGOs and other implementing agencies that want to receive CSR funds from companies.
Effective 1st April 2021, only those entities that file and get approval for CSR-1 can carry out CSR activities on behalf of corporates.
Why MCA Introduced CSR-1
The change was introduced via Notification G.S.R. 40(E) dated 22 January 2021, amending Rule 4(1) of the Companies (CSR Policy) Rules, 2014.
Key objectives:
- Ensure only eligible and registered entities handle CSR funds
- Enable companies to verify implementing partners
- Improve transparency in CSR spending
Who Must File CSR-1?
Any NGO or entity acting as an implementing agency must file CSR-1 to be eligible to receive CSR funding. This includes:
- Section 8 Companies
- Registered Public Trusts
- Registered Societies
Conditions:
- Must be registered under Section 12A and 80G of the Income Tax Act
- Must have valid PAN
How to File CSR-1: Step-by-Step Guide
Here’s a simple process for NGOs to file Form CSR-1 on the MCA portal:
- Login to MCA21 portal
- Go to MCA Services > Company e-Filing
- Download and fill e-Form CSR-1
- Attach required documents:
- PAN of the entity
- Registration certificate
- 12A and 80G approval copies
- Digital Signature Certificate (DSC) of an authorised person
- Upload form and pay NIL fee
- Once verified, unique CSR Registration Number is issued
Legal Reference: Notification and Rule
- Rule 4(1), Companies (CSR Policy) Rules, 2014 – Amended to mandate CSR-1
- G.S.R. 40(E), dated 22.01.2021 – Introduced Form CSR-1 and new procedural framework
- Filing CSR-1 is applicable only for CSR projects carried out through third-party agencies
Implications for Companies
Companies must ensure that their CSR partners are MCA-registered via CSR-1. Without this, expenses will not qualify as CSR under Section 135 of the Companies Act, 2013.
Company Compliance Checklist:
- Verify CSR Registration Number of NGO
- Maintain records of agreement and project outcomes
- Report CSR activities in Board’s Report using Annexure II (Form AOC-4)
Expert View: Why This Matters
“The CSR-1 mandate filters out unregistered NGOs, ensuring funds go to credible, tax-compliant entities. This is a significant step for corporate governance and public trust,” says CA Ramesh Gupta, CSR advisor.
Summary
Form CSR-1 is mandatory for NGOs to receive CSR funds from companies, per MCA rules. File CSR-1 on the MCA portal to stay compliant and access corporate CSR budgets.
FAQs
Q1. Is CSR-1 applicable to internal CSR projects?
No. CSR-1 is required only when companies engage external implementing agencies.
Q2. What happens if an NGO does not file CSR-1?
It will not be eligible to receive CSR funds from companies under Section 135.
Q3. Is there a fee to file CSR-1?
No. Filing CSR-1 is completely free on the MCA portal.
Q4. How long is the CSR registration valid?
Indefinite, unless the entity is later found non-compliant or deregistered by authorities.
Final Thoughts
The CSR-1 e-form is a crucial reform in India’s CSR compliance landscape. For NGOs, it’s a gate pass to corporate funds. For companies, it’s a filter to ensure only compliant partners handle CSR projects.
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