In view of amendments in Section 135/ Schedule VII of the Companies Act, 2013 and also in the Companies (CSR Policy) Rules, 2014 notified on 22/01/2021, the MCA has released an updated (2021) set of Frequently Asked Questions (FAQs) on the Corporate Social Responsibility (CSR), for better understanding and facilitating effective implementation of CSR, vide General Circular 14/2021 dt. 25/08/2021, which supersedes all previous General Circulars/ Clarifications/ Letters of the Ministry on the Subject, issued from time to time.
Amended CSR Rules, inter alia, provides for undertaking inhouse R&D Activity for COVID vaccine, mandatory registration of CSR projects from 01/04/2021, engaging International Organizations & collaborating with other companies for CSR projects, CFO to certify utilisation of funds, formulation of annual CSR plan and display of the same along with execution thereof on the company website, set off of excess CSR expenditure in the three succeeding years, acquisition of capital assets from CSR funds, transfer of unspent CSR funds to the Govt. designated funds, annual report on CSR including impact assessment, etc.
It may be noted that the amended CSR Rules provides companies with the flexibility to adjust/ setoff excess CSR spending of a financial year against the spending obligation of the three subsequent financial years. This amendment has been made with prospective effect, i.e. no carry forward shall be allowed in respect of any excess amount spent in financial year(s) prior to FY 2020-21.
Accordingly, MCA has released consolidated/updated FAQs on CSR which clarifies all the relevant aspects, like Applicability, Framework, Expenditure, Activities, Implementation, Ongoing Project, Treatment of Unspent Amount, Enforcement, Impact Assessment, Reporting and Disclosure, etc.
MCA General Circular 14/2021 dt. 25/08/2021: Updated Set of Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR)