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Pankaj Tyagi
| Updated: 22 Oct, 2021 | Category: NGO

Form CSR-1: Why it is Mandatory for NGOs?

Form CSR-1: Why it is Mandatory for NGOs

All Non-Government Organizations (NGOs) seeking to procure CSR funding and the implementing bodies are mandated to submit Form CSR-1. By submitting such a form, the social agency gets registered and becomes eligible to avail funds from corporate. W.e.f Apr 1, 2021, the Ministry of Corporate Affairs has made this e-form available on its portal & made it compulsory to file it. The CSR-1 Form aims at probing CSR spending in the country. 

What is the role of Form CSR-1? 

  • Form CSR-1 or “eForm CSR-1” refers to a registration form for securing CSR funding. Ministry of Corporate Affairs specifies this Form as “Registration of Entities for undertaking CSR activities”.  
  • Form CSR-1 shall be signed & furnished digitally by the company. This Form must be validated electronically by a professional like CS or a Chartered Accountant or a Cost Accountant.
  • All companies who are aiming to undertake CSR projects must file this e-form on the MCA official website.

Common benefits of securing CSR-1 registration

  • Improved Public Image
  • Enhanced Goodwill of NGO
  • No hassles in undertaking CSR activities
  • Mitigate legal hurdles in securing funding from corporate

Significance of CSR-1 Registration

The Ministry of Corporate Affairs[1] (MCA) has made the e-form for CSR-1 available on its official portal & made it a legal compulsion for all social avenues seeking CSR funding. As per the notification released by MCA on April 1, 2021, CSR funding is only accessible to NGOs that have CSR-1 registration at their disposal. 

The norms of the 2019 amendment to Companies Act, 2013 concerning CSR were introduced on Jan 22. In light of the new norms, every agency cited under sub-rule (1) will have to secure CSR registration after filing CSR-1 Form on the MCA’s portal. 

The CSR programmes approved before Apr 1, 2021, shall remain unaffected by these sub-rules provisions. 

 After the successful filing of the form CSR-1, the MCA portal shall generate the unique registration number for future reference. 

In this way, the MCA will administer a list of all implementing companies, thereby ensuring timely fulfilment of proposed undertakings. The past track record of such agencies can be referred to by the entities & help them decide their engagement for upcoming CSR undertakings.

Read our article:How to approach NGO Registration in India? Forms & Features

Fundamental Documents required for filing CSR-1 form

  • 12AB and 80G registration order copy
  • NGO’s PAN card
  • Contact details such as contact number and email 
  • Digital Signature Certificate and PAN of the Chairperson
  • Details of members serving the organization
  • Registration certificate of Section 8 entity 
  • Trust Deed (for agency operating as Trust)
  • Memorandum for a registered Society

Form CSR-1 should enclose the digital signature of the given individuals: 

  • Directors serving the Section 8 entity
  • Any one of trustees serving the Registered Trust
  • By Secretary/Chairperson in case of Registered Society
  • Authorized signatory in case of a company functioning under the ambit of State Legislature or Act of Parliament
  • A Practising professional like CA or CS in practice 

Types of NGOs having access to CSR-1 registration

NGOs that are legally eligible to furnish Form CSR-1 are as follows: 

  • An entity functioning u/s 8 of the Act, or a registered society or Trust, registered u/s 12A & 80G of the IT Act, 1961, established by the entity, either single or along with any other entity. 
  • An entity functioning u/s 8 of the Act or registered society or a registered trust, working under Central Government or State Government.
  • Any entity functioning under an Act of a State legislature or Parliament 
  • An entity functioning u/s 8 of the Act, or a registered society or a registered trust, registered u/s 12A and 80G of the IT Act, 1961, 7 has a proven track record of minimum three years in undertaking same activities. 

Important Points with respect to filing of Form CSR-1

  • CSR-1 form is supposed to be filed with the ROC w.e.f day of April 2021.
  • In the case of a company being formed by a company or group of companies, a maximum of 5 CIN(s) of such entities can be enclosed in the e-form.
  • Email ID is required to be provided in the Form, which is further validated via One Time Password (OTP).
  • The applicant can send One Time Password only after successful Pre-scrutiny of the Form.
  • The One Time Password shall be routed to the registered email ID against one Form. The portal facilitates ten attempts to complete such a task. Once generated, OTP shall remain in effect for 30 minutes. 
  • Applicants failing to fulfil the said task in the given attempt can download the new Form and complete the filing on the same day. 
  • Check the validity of the DIN or PAN of the key management officials such as Directors/CEO/ Authorized Representatives before indulging in the registration process. 
  • Maximum of 10 rows shall be available for providing the details of key management officials of the company. 

Conclusion

The advent of Form CSR-1 has enabled the tax authority to ensure better probing on NGOs’ funding transactions. But that doesn’t imply that it will only benefit the tax authority. The timely filing of Form CSR-1 would enable the NGOs to curtail the legal hurdles during the funding campaign. Also, this will make them more reliable and transparent.

Read our article:An Outlook: Registering an NGO in India

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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