The Ministry of Corporate Affairs (MCA) on Wednesday issued the Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) vide General Circular No. 14/2021.
The broad framework of CSR has been provided in Section 135 of the Companies Act, 2013 (herein after referred as ‘the Act’), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014 (herein after referred as ‘the CSR Rules’). Further, Ministry had also issued clarifications including FAQs from time to time on various issues concerning CSR.
“A company satisfying any of the criteria during the immediately preceding financial year is required to comply with CSR provisions specified under section 135(1) of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 made thereunder: (i) net worth of Rs.500 crore or more, or (ii) turnover of rupees one thousand crores or more, or (iii) net profit of rupees five crores or more.” clarified in the circular.
The Government monitors the compliance of CSR provisions through the disclosures made by the companies in the MCA 21 portal. For any violation of CSR provisions, action can be initiated by the Government against such non-compliant companies as per provisions of the Companies Act, 2013 after due examination of records, and following due process of law. Non-compliance of CSR provisions has been notified as a civil wrong w.e.f. 22nd January, 2021.