.1 What is foreign contribution?
Ans. As defined in Section
2(1)(h) of FCRA, 2010, "foreign contribution" means the donation, delivery or transfer
made by any foreign source,
─
(i) of any article, not being an
article given to a person* as a gift for his personal use, if
the market value, in India,
of such article,
on the date of such gift is not more than
such sum** as may be
specified from time
to time by the Central
Government by rules
made by it in this behalf;
(ii) of any currency, whether
Indian or foreign;
(iii) of any security as defined
in clause (h) of section 2 of the securities
Contracts(Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign
Exchange Management Act, 1999.
Explanation 1 – A donation,
delivery or transfer or any article, currency
or foreign security referred to in this clause by any person who has received it form any foreign
source, either directly or through
one or more persons, shall also be deemed to be foreign contribution with the meaning of this
clause.
Explanation 2 ‒ The interest
accrued on the foreign contribution deposited
in any bank referred to in sub-section (1) of Section 17 or any other income derived from the foreign
contribution or interest thereon
shall also be deemed to be foreign contribution within the meaning
of this clause.
Explanation 3 ‒ Any amount received, by an person
from any foreign
source in India, by way of fee (including fees charged by an educational institution in India from
foreign student) or towards cost in
lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce
whether within India or outside India
or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the
definition of foreign contribution within the
meaning of this clause.
* In terms of FCRA, 2010 "person" includes
‒ (i) an individual; (ii) a Hindu
undivided family; (iii) an association; and (iv) a company
registered under
section 25 of the Companies
Act, 1956.
**The sum, as stated at (i)
above, has been specified as Rs. 25,000/- vide
the Foreign Contribution (Regulation) Amendment Rules, 2012 [G.S.R.
292 (E) dated 12th April,
2012].
Q.2 Whether earnings
from foreign client(s) by a person in lieu of goods
sold or services rendered by it is treated as foreign contribution?
Ans. No. As clarified at
Explanation 3 above, foreign contribution excludes
earnings from foreign client(s) by a person in lieu of goods sold or services
rendered by it as
this is a transaction of commercial nature.
Q.3 Section 2(c)(i) of repealed
FCRA, 1976 inter alia defined foreign contribution as the
donation, delivery or transfer made by any foreign source of any article, not given to a person as a gift for
personal
use, if the market value, in
India, of such article exceeds one thousand rupees.
What limit has been prescribed in FCRA, 2010 in respect
of such articles?
Ans. The limit has been specified
as Rs. 25000/- through insertion
of the following Rule 6A in FCRR, 2011 vide the
Foreign Contribution
(Regulation) Amendment Rules, 2012 [G.S.R.
292 (E) dated 12th April,
2012]:
"6A. When articles
gifted for personal use do not amount to foreign contribution. - Any article gifted to a person for his personal
use whose market value in India on
the date of such gift does not exceed rupees twenty-five thousand shall not be a foreign contribution within the meaning
of sub-clause (i) of clause (h) of sub-section (1) of section (2)."
Q.4 What is a foreign source?
Ans. Foreign source,
as defined in Section 2(1) (j) of FCRA,
2010 includes:-
(i) the Government of any foreign country
or territory and any agency of such Government;
(ii) any international agency,
not being the United Nations or any of its
specialized agencies, the World Bank, International Monetary Fund or such other agency as the Central
Government may, by notification, specify
in this behalf;
(iii) a foreign company;
(iv) a corporation, not being a
foreign company, incorporated in a foreign country or territory;
(v)
a multi-national corporation referred
to in sub-clause (iv) of clause (g);
(vi) a company within the meaning of the Companies
Act, 1956, and more than one-half of the nominal
value of its share capital is held,
either singly or in the aggregate, by one or more of the following, namely:-
(A) the Government of a foreign country
or territory;
(B)
the citizens of a
foreign country or territory;
(C)
corporations incorporated in a foreign
country or territory;
(D) trusts, societies or other
associations of individuals (whether incorporated
or not), formed or registered in a foreign country or territory;
(E) Foreign company;
(vii) a trade union in any foreign
country or territory, whether or not registered in such foreign
country or territory;
(viii) a foreign trust or a foreign
foundation, by whatever name called,
or such trust or foundation mainly financed by a foreign country or territory;
(ix) a society, club or other
association or individuals formed or registered outside India;
(x) a citizen of a foreign country;”
List of agencies
of the United Nations, World Bank and some other
International agencies/multilateral organisations, which are not
treated as ‘foreign source’,
are available on the website http://mha.nic.in/fcra/intro/FCRA-exemptedAgenciesUN.pdf
Q.5 Who can receive foreign
contribution?
Ans. A ‘person’, as defined in Section 2(1)(m)
with the exclusion of those
mentioned in Section 3 of FCRA, 2010, having a definite cultural, economic, educational, religious or social programme
can receive foreign contribution
after it obtains the prior permission of the
Central Government, or gets itself registered with the Central Government. Illustrative but not exhaustive lists
of activities which are
permissible and may be carried out by associations of different nature are available on the website — http://mha.nic.in/fcra/intro/permitted_programs.htm
Q.6 Who cannot receive foreign
contribution?
Ans. As defined
in Section 3(1) of FCRA,
2010, foreign
contribution cannot
be accepted by any:
(a) a candidate for election;
(b) correspondent, columnist,
cartoonist, editor, owner, printer or publisher of a registered newspaper;
(c) Judge, government servant or employee
of any Corporation or any other body controlled on owned by the Government;
(d) member of any legislature;
(e)
political party or office bearer thereof;
(f) organization of a political nature as may be specified
under sub- section
(1) of Section 5 by the Central
Government.
(g) association or company
engaged in the production or broadcast of audio
news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as
defined in clause (r) of sub-section
(i) of Section 2 of the Information Technology Act, 2000 or any other
mode of mass communication;
(h) correspondent or columnist,
cartoonist, editor, owner of the association
or company referred to in clause
(g).
Explanation – In clause (c) and section
6, the expression
“corporation’ means a
corporation owned or controlled by the Government and includes a Government company
as defined in section 617 of
the Companies Act, 1956.
(i) individuals or associations
who have been prohibited from receiving foreign
contribution.
Q.7 Are there any banned organisations from whom foreign
contribution should not be accepted?
Ans. Yes. FCRA is meant to
ensure that foreign contribution is received
from legitimate sources and utilised for legitimate purposes by any person. A list of banned
organisations is available in MHA's website http://mha.nic.in/uniquepage.asp?Id_Pk=292 . In particular, the list of foreign entities/individuals can be seen in http://www.un.org/sc/committees/1267/AQList.htm
Q.8 Whether donation given by
Non-Resident Indians (NRIs) is treated as ‘foreign
contribution’?
Ans. Contributions made by a
citizen of India living in another country
(i.e., Non-Resident Indian), from his personal savings, through the normal banking channels, is not treated
as foreign
contribution. However,
while accepting any donations from such NRI, it is advisable to obtain his passport details to ascertain
that he/she
is an Indian passport
holder.
Q.9 Whether donation
given by an individual of Indian origin
and having foreign
nationality is treated
as ‘foreign contribution’?
Ans. Yes. Donation from an
Indian who has acquired foreign citizenship is treated as foreign contribution. This will also apply
to PIO card holders
and to Overseas Citizens of India. However,
this will not apply to
'Non-resident Indians', who still hold Indian
citizenship.
Q.10 Whether foreign
remittances received from a relative
are to be treated as foreign contribution as per FCRA,
2010?
Ans. The position in this
regard as given in Section
4(e) of FCRA,
2010 and Rule 6
of FCRR, 2011 are as under:
Subject to the provisions of section 10 of the FCRA, 2010,
nothing contained in section
3 of the Act shall apply to the acceptance, by
any person specified in that section, of any foreign contribution where such contribution is accepted by him from his relative.
However, in terms of Rule 6
of FCRR, 2011, any person receiving foreign
contribution in excess of one lakh rupees or equivalent thereto in a financial year from any of his relatives shall
inform the Central Government in Form FC-1 within thirty days from the date of receipt of such contribution. This form
is available on the website http://mha.nic.in/fcra/forms/fc-1.pdf
Q.11 Whether individuals not covered under Section 3 or a HUF can accept
foreign contribution freely for the purposes listed in section
4 of FCRA, 2010?
Ans.Yes. Since, subject to the
provisions of Section 10, even the persons
specified under section 3, i.e., persons not permitted to accept foreign contribution, are allowed
to receive foreign contribution for
the purposes listed in section 4, it is obvious that Individuals in general and a HUF are permitted to accept foreign contribution without permission for the
purposes listed in section 4. However,
it should be borne in mind that the monetary limit for acceptance of foreign
contribution in the form of any article
given as gift
to a person for his personal
use has been specified as Rs.
25,000/ vide FCR Amendment
Rules, 2012.
Q.12 Can the fee paid by the
foreign delegates/participants attending/participating in a conference/seminar etc. be termed
as foreign contribution and thus require
permission from FCRA?
Ans. “Delegate/participation Fees” paid in foreign
currency by foreign
delegates/participants for participation in a conference/seminar and which is utilized for the purpose of
meeting the expenditure of hosting
the conference/seminar is not treated as foreign contribution and as such no permission under FCRA is required.
Q.13 Whether a Company incorporated in India under
the Companies Act,
1956 having its operations
in 2 or more countries is to be treated
as a MNC/foreign source
under FCRA, 2010?
Ans. No. However, as defined
under section 2(j)(vi), a company within the
meaning of the Companies Act, 1956 having more than one-half of the nominal value of its share capital
held, either singly or in the aggregate, by one or more of the following
will be treated as a "foreign source":
(A) the Government of a foreign country
or territory;
(B) the citizens of a foreign country
or territory;
(C)
corporations incorporated in a foreign
country or territory;
(D) trusts, societies or other
associations of individuals (whether incorporated
or not), formed or registered in a foreign country or territory"
Q.14 Can foreign contribution be received in rupees?
Ans. Yes. Any amount received from ‘foreign source’
in rupees or foreign
currency is construed as ‘foreign contribution’ under law. Such transactions even in rupees term are
considered foreign contribution.
Q.15 Will interest or any other income
earned from foreign
contribution be considered foreign contribution?
Ans. Yes.
Q.16 Whether interest or any
other income earned out of foreign contributions be shown as fresh foreign
contribution receipt during
that year or not?
Ans. Yes. The interest or any
other income earned out of such deposit should
be shown as second / subsequent foreign
contribution receipt in the
annual return during the year in which it is earned.
Q.17 Can NGOs use the foreign contributions for investment in Mutual Funds and other
speculative investments?
Ans. No. Speculative activities have been defined
in Rule 4 of FCRR
– 2011 as under:-
1. (a) any activity or
investment that has an element of risk of appreciation
or depreciation of the original investment, linked to marked forces, including investment in mutual funds or in shares;
(b) participation in any scheme
that promises high returns like investment
in chits or land or similar assets not directly linked to the declared aims and objectives of the organization or association.
(2) A debt-based secure investment shall not be treated as speculative investment.
(3) Every association shall maintain
a separate register
of investments.
(4) Every register of
investments maintained under sub-rule (3) shall be submitted for audit.
In view of the
above, secure investments and fixed deposits in any bank or Government approved financial institution which ensures
a fixed return will not be
treated as speculative investment.
Q.18 Can capital assets purchased
with the help of foreign contributions be acquired in the name of the office bearers
of the association?
Ans. No. Every asset purchased with foreign contribution should be acquired and possessed in the name of
the association since an association has a
separate legal entity distinct from its
members.
Q.19 Can an association invest
the foreign contribution received by it in profitable ventures and proceeds
can be utilized for welfare activities?
Ans. No. The association
should utilize such funds for the welfare purpose or activities for which it is received.
The utilization
should be in
line with the objectives of the association. However, foreign contributions can be utilized for self-sustaining
activities, not meant for
commercial purposes.
Q.20 Can foreign contribution be received in and utilised
from multiple Bank Accounts?
Ans. No fund other than foreign
contribution can be deposited in the exclusive
single FC account of a Bank, as mentioned in the order for registration or prior permission granted
by MHA, to be separately maintained by the associations. However, one or more accounts
in one or more banks may be opened for utilising the foreign
contribution after it has been
received provided that no funds other than that foreign contribution shall be received or deposited in such
account or accounts and in all such cases, intimation on plain paper shall have
to be furnished
to MHA within 15 days of the opening of the account.
Q.21 Whether inter-account funds
transfer shall be allowed within the multiple accounts that an Association is now permitted to open for the purpose
of utilizing the foreign
contributions and the level
of
diligence required
on the part of the Banks in this regard?.
Ans. Transfer of funds is allowed
from the designated FC account of an Association to the multiple account or
accounts opened for its utilization.
However, no funds other than the amount received in the designated FC account shall be received or deposited in such
multiple account or accounts.
Inter-account transfer of funds between the multiple
accounts is not permissible. As such, the banks should apply full diligence to keep track of the transfers.
Q.22 Can foreign contribution be mixed with local receipts?
Ans. No. Foreign contribution cannot be deposited or utilised from
the bank account
being used for domestic
funds.
Q.23 Whether expenses
like 'interest paid to
bank', 'bank charges', 'hospitality' etc. can
be included in 'administrative expenses'?
Ans. No. The definition of as
'administrative expenses', as given in Rule 5 of FCRR, 2011 is explicit in this regard.
Q.24 Is there any restriction on transfer of funds to other organisations?
Ans. Yes.
Section 7 of FCRA, 2010 states:- “No person
who –
(a) is registered and granted a
certificate or has obtained prior permission under this Act; and
(b) receives any foreign contribution,
shall transfer such foreign
contribution to any other person unless such other person is also registered and
had been granted the certificate or obtained the prior permission under this Act:
Provided that such person may
transfer, with the prior approval of the
Central Government, a part of such foreign contribution to any other person who has not been granted a
certificate or obtained permission under this Act in accordance with the rules made by the Central Government.”
Rule 24 of FCRR, 2011, as
amended vide the Foreign Contribution (Regulation) Amendment
Rules, 2012 [G.S.R.
292 (E) dated 12th April,
2012] prescribes the procedure for transferring foreign
contribution
as under:
"24. Procedure for
transferring foreign contribution to any unregistered person.
─ (1) A person who has been granted a
certificate of registration or
prior permission under section 11 and intends
to transfer part of the foreign contribution received by him to a person
who has not been granted
a certificate of registration or
prior permission under the Act, may transfer such foreign contribution to an extent not exceeding ten per cent of the total value
thereof and for this purpose, make
an application to the Central Government in Form FC-10.
http://mha.nic.in/fcra/forms/fc-10.pdf
(2) Every application made under
sub-rule (1) shall be accompanied by a declaration to the effect that-
(a) the amount proposed to be transferred during the financial
year is less than ten per cent of the total value of the foreign contribution received by him during the financial year;
(b) the transferor shall not
transfer any amount of foreign contribution until the Central
Government approves such transfer.
(3) A person who has been
granted a certificate of registration or prior
permission under section 11 shall not be required to seek the prior approval of the Central
Government for transferring the foreign
contribution received
by him to another person
who has been granted a certificate of registration
or prior permission under the Act provided
that the recipient has not been proceeded against under any of the provisions of the Act.
(4) Both the transferor and the
recipient shall be responsible for ensuring
proper utilisation of the foreign contribution so transferred and such transfer of foreign contribution
shall be reflected in the returns in Form FC-6 to be submitted by both
the transferor and the recipient.". http://mha.nic.in/fcra/forms/fc-6.pdf
Q.25 How would an organisation
that is registered or has obtained prior
permission under FCRA and intends to transfer a part of the foreign
contribution received by it to another organisation would know whether the recipient organisation has
been proceeded against under FCRA?
Ans. Where any organisation is proceeded against
under FCRA, it
is done with due intimation to the
organisation concerned. Therefore, the
donor organisation is advised to insist on a written undertaking from the
intending recipient organisation.
Q.26 What are the eligibility criteria for grant of registration?
Ans. For grant of registration under FCRA, 2010,
the association should:
(i) be registered under the
Societies Registration Act, 1860 or the Indian Trusts
Act, 1882 or section 25 of the Companies Act, 1956 etc;
(ii) normally be in existence for
at least three years and has undertaken
reasonable activity in its chosen field for the benefit of the society for which the foreign
contribution is proposed to be utilised. For this purpose,
the association should have spent at least Rs.10,00,000/- over the last three
years on its activities, excluding
administrative expenditure. Statements of Income & Expenditure, duly audited by Chartered Accountant, for last
three years are to be submitted to substantiate that it meets the financial parameter.
Q.27 What are the eligibility criteria for grant of prior permission?
Ans. An organisation in formative
stage is not eligible for registration.
Such organisation may apply for grant of prior
permission under FCRA, 2010. Prior permission is granted for receipt of a specific amount from a specific
donor for carrying out specific activities/projects. For this purpose,
the association should:
(i) be registered under the
Societies Registration Act, 1860 or the Indian Trusts
Act, 1882 or section 25 of the Companies Act, 1956 etc;
(ii) submit a specific commitment
letter from the donor indicating the amount
of foreign contribution and the purpose for which it is proposed to be given; and
(iii) submit copy of a reasonable
project for the benefit of the society
for which the foreign contribution is proposed to be utilised.
Q.28 Whether the amount of
foreign contribution for which prior permission has been granted
can be received by an association in installments?
Ans. There is no bar on receiving
such foreign contribution in installments.
However, the aggregate amount should not exceed the specified amount for which prior permission has been granted.
The association shall have to submit
the mandatory return in FC-6 form for receipt and utilisation of the foreign
contribution on a yearly basis,
till the amount of foreign contribution is
fully utilised. Even if no transaction
takes place during a year, a NIL return should be submitted.
Q.29 Whether an association should
open an exclusive FC A/c before submission of an application for registration or prior
permission?
Ans. Yes. Since the FC A/c through
which foreign contribution is proposed
to be received and utilised is to be mentioned in the application seeking registration or prior permission, as the
case may be, the association should
open such an exclusive FC A/c with a Bank. This A/c number would be mentioned
in the letter granting registration or prior permission to the
association.
Q.30 Whether Banks should allow an association which is applying
for registration or prior permission under FCRA, 2010 to open an exclusive
FC A/c with INR?
Ans. Yes. However, the Banks should
not allow any foreign inward
remittance in that A/c till such time the association is granted
registration or prior
permission, as the case may be.
Q.31 Whether Banks should credit
any foreign contribution received by an
association to its account even if the association does not have registration/prior permission from MHA and subsequent reporting can be made by Banks to MHA?
Ans. Rule 16 (1) of FCRR, 2011
states that every bank shall send a report
to the Central Govt. within 30 days of receipt of foreign contribution by any person who is required
to obtain a certificate a registration
or prior permission under the Act, but who was not granted such certificate or prior permission on the date of
receipt of such remittance. Further,
Rule 16(3) prescribes that the banks shall send
a report to the Central Govt. within 30 days from the date of such last transaction in respect of receipt of any foreign
contribution in excess
of Rs.1 Crore or equivalent thereto in a single transaction or in transactions within a
duration of 30 days, by any person whether registered or not under the Act.
In view of the above, it
follows that bank may credit any foreign contribution
received by an Association without registration or prior permission. However, while the banks
can prevent such a situation in cases where a
cheque is presented by the recipient of foreign contribution for deposit in its savings/current account, it may
not always be possible when the
foreign remittance is through wire transfer. Therefore, in all such cases,
besides sending a report to
MHA as per Rule, the bank should not allow any withdrawal or transfer or utilisation of the FC amount
till such time the Association
produces documentary evidence
from MHA permitting it to do so.
Q.32 Should the Banks report
transactions pertaining to foreign contributions
which are returned back to the remitter by the
beneficiary Association for want of registration/prior permission from MHA?
Ans. It is not necessary for the
bank to report such foreign contribution that is returned
to the donor without crediting
in the account of the recipient.
Q.33 Whether reporting by Banks is also applicable for transfer of funds
between FCRA accounts of two or more associations?
Ans. Yes. Reporting by Banks is also applicable to transfer of funds from one
FCRA registered Association to another.
Q.34 Whether the reference period
prescribed in Rule 16(3) of FCRR, 2011
for reporting by Banks in respect of transactions during 30-days period
should mean calendar month?
Ans. For the purpose
of reporting to MHA, 30 days period
may be construed as a calendar
month.
Q.35 What are the conditions to be met for the grant of registration and prior permission?
Ans. In terms of Sec.12 (4) of FCRA, 2010, the following
shall be the conditions for the grant of registration and prior permission:
(a) The 'person' making an application for registration or grant of prior
permission-
(i) is not fictitious or benami;
(ii) has not been prosecuted or
convicted for indulging in activities aimed at conversion through
inducement or force, either directly
or indirectly, from one
religious faith to another;
(iii) has not been prosecuted or
convicted for creating communal tension or disharmony in any specified district or any other part of the country;
(iv) has not been found
guilty of diversion or mis-utilisation of its funds;
(v) is not engaged or likely
to engage in propagation of sedition or advocate violent
methods to achieve its ends;
(vi) is not likely to use the
foreign contribution for personal gains or divert
it for undesirable purposes;
(vii) has not contravened any of the provisions of this Act;
(viii) has not been prohibited from accepting foreign
contribution;
(ix) the person being an
individual, such individual has neither been
convicted under any law for the time being in force nor any prosecution for any offence is pending against
him.
(ix) the person being other than an individual, any of its directors
or office
bearers has neither been convicted under any law for the time being in force nor any prosecution for any offence is
pending against him.
(b) the acceptance of foreign
contribution by the association/ person
is not likely to affect prejudicially –
(i) the sovereignty and integrity of India; or
(ii) the security, strategic, scientific or economic interest
of the State; or
(iii) the public interest; or
(iv) freedom or fairness of election to any Legislature; or
(v)
friendly relation with any foreign
State; or
(vi) harmony between
religious, racial, social,
linguistic, regional groups,
castes or communities.
(c) the acceptance of foreign
contribution-
(i) shall not lead to incitement of an offence;
(ii)
shall not endanger
the life or physical safety of any person.
Q.36 Can a private limited
company or a partnership firm get registration or prior permission
under FCRA, 2010?
Ans. As per the definition of
the “person” in the FC(R)Act, 2010 which
includes an “association” which in turn is defined as an association of individuals, whether incorporated or not, having
an office in India and includes a
society, whether registered under the Societies Registration Act, 1860, or not, and any other organisation,
by whatever name called, a private limited
company too may seek prior
permission/registration for receiving
foreign funds in case they wish
to do some charitable work at some point of time.
Q. 37 Whether an individual or a Hindu Undivided Family
(HUF) can be given registration or prior
permission to accept foreign contribution
in terms of section 11 of FCRA,
2010?
Ans. The definition of the
‘person’ in the Foreign Contribution (Regulation) Act, 2010 includes
any individual and ‘Hindu Undivided
Family’ among others. As such an Individual or an HUF is also eligible
to apply for prior permission to accept foreign contribution.
Q.38 Whether infusion
of foreign share capital in a company
registered under section 25 of the Companies Act, 1956 attracts
the provisions of FCRA,
2010?
Ans. Yes, infusion of foreign share capital in a company
registered under section 25 of
the Companies Act, 1956 is treated as foreign contribution.
Q.39 Is recommendation of District
Collector or Deputy
Commissioner or District Magistrate mandatory for
submission of an application for registration or prior
permission?
Ans. No. Submission of
verification certificate from the District Collector
or Deputy Commissioner or District Magistrate is not mandatory. However, in certain cases, if the amount of foreign contribution for which prior
permission is being
sought is less than Rs.50 lakh, submission of such a
certificate assists in speedy clearance of the application.
Q.40 If an application for
registration or prior permission is submitted online by an association, does it need to submit
that application in physical form also?
Ans. Yes. When an application is filed online,
a printout of the same is to be taken after submission and
thereafter, it should be submitted,
duly signed by the Chief Functionary of the Association, along with the requisite documents to the Ministry of Home
Affairs. The prescribed forms for submission of application for grant of
Registration and Prior Permission are FC-3 and FC-4 respectively. The forms are available
at MHA website
http://mha.nic.in/fcra/forms/fc-3.pdf and http://mha.nic.in/fcra/forms/fc-4.pdf respectively.
Q.41 What are the documents to be enclosed
with the application?
Ans. (a) Following documents
should be enclosed with the application for grant of Registration:
(i) Hard copy of the online application, duly signed by the Chief
Functionary of the association;
(ii) Certified copy of registration certificate or Trust deed etc., as the case
may be;
(iii) Activity Report indicating details
of activities during the last
three years;
(iv) Copies of audited statement
of accounts for the past three years (Assets
and Liabilities, Receipt and Payment, Income and Expenditure);
(v) If functioning as editor,
owner, printer or publisher of a publication
registered under the Press and Registration of Books Act, 1867, a certificate from the Registrar
of Newspapers for India that the publication is not a newspaper
in terms of section 1(1) of the said Act.
(vi) Fee of Rs. 2000/- by means
of demand draft or banker’s cheque in favour of the “Pay and Accounts Officer,
Ministry of Home Affairs”, payable
at New Delhi.
(b) Following
documents should be enclosed with the application for grant of Prior
Permission:
(i) Hard copy of the online
application, duly signed by the Chief Functionary of the
association;
(ii) Certified copy of registration certificate or Trust deed etc., as the case
may be;
(iii) Commitment letter
from foreign donor
specifying the amount of foreign contribution and the purpose for
which it is proposed to be given;
(iv) Copy of the project
report for which
foreign contribution is solicited/being offered
and is proposed to be utilised;
(v) If functioning as editor,
owner, printer or publisher of a publication
registered under the Press and Registration of Books Act, 1867, a certificate from the Registrar
of Newspapers for India that the publication is not a newspaper
in terms of section 1(1) of the said Act.
(vi) Fee of Rs. 1000/- by means
of demand draft or banker’s cheque in favour
of the “Pay and Accounts
Officer, Ministry of Home Affairs”,
payable at New Delhi.
Note: The hard copy of the
on-line application along with all the documents mentioned above must reach the Ministry
of Home Affairs,
Foreigners Division (FCRA Wing),
NDCC-II Building, Jai Singh Road, New Delhi
– 110 001 within thirty days of the submission of the on-line application, failing which the request of
the person for grant of registration or prior
permission, as the case may be, shall be deemed
to have ceased.
Q.42 How to find the status of pending application for registration/prior
permission. ?
Ans. Status of pending
applications for grant of registration or prior permission may be checked on-line from the Ministry of Home
Affairs web-site – http://mha.nic.in/fcraweb/fc_online.htm. One needs to fill
in the numbers on acknowledgement letter
or any correspondence from MHA (Foreigners Division) in the blank
format which pops up on the screen
after selection of status enquiry icon (registration/prior permission, as the case may be)
Q.43 Whether foreigners can be
appointed as Executive Committee members of an association seeking registration or prior permission?
Ans. Organisations having foreign
nationals, other than of Indian origin, as members of their executive committees or governing bodies are generally not permitted to receive foreign
contribution.
Foreigners may, however, be allowed to be associated with such associations in an ex-officio capacity, representing multilateral
bodies, foreign contribution from whom is exempted from the purview
of the Foreign
Contribution (Regulation) Act, 2010, or in a purely
honorary capacity
depending upon the persons stature
in his/her field
of activity. Subject to relaxation
given on a case to case basis, foreign nationals fulfilling the following conditions may be appointed
as Executive Committee members, after obtaining prior approval of the Central
Government:
(i)
the foreigner is married to an Indian
citizen;
(ii) the foreigner has been living and working in India for at least five years;
(iii) the foreigner has made
available his/her specialized knowledge, especially in the medical
and health related
fields on a voluntary
basis in India, in the past;
(iv) the foreigner is part of the
Board of Trustees/Executive Committee
in terms of the provisions in an inter-governmental agreement;
(v) the foreigner is part of the
Board of Trustee/Executive Committee, in an ex-officio capacity representing a multilateral body
which is exempted from the definition of foreign source.
The need for such an appointment should,
however, be adequately justified.
Q.44 Whether Government servants, Judges and employees of a Government
owned/controlled company/body
can be on the executive committees/boards
of an association?
Ans. Yes. The legal entity of a 'person' under FCRA, 2010 is
distinct from am individual person. Therefore, individuals who cannot receive foreign contribution may happen
to be on the executive committees/boards
of such an association.
Q.45 Whether organisations under
Central/State Governments are required to obtain registration or prior permission under FCRA, 2010
for accepting foreign
contribution?
Ans. In terms of Gazette
Notification S.O. 1492(E) dated 01.07.2011, http://mha.nic.in/pdfs/ExempStatBodi-010711.pdf all statutory bodies
constituted or established by or under a Central Act or State Act requiring to have their accounts
compulsorily audited by the Comptroller
& Auditor General of India are exempted from all the provisions of FCRA, 2010.
Q.46 What is the procedure
for seeking change
in the name/address of an association registered under FCRA?
Ans. For seeking change
in the name/address of the association, one should use the
prescribed form available on MHA’s website
http://mha.nic.in/fcra/forms/chng_name_addr.pdf and submit the same along with
the requisite documents specified therein.
Q.47 What is the procedure for change of designated FC Bank Account?
Ans. For change
of the bank account, an application in
prescribed form mentioning the details of the old bank account
and the proposed new bank account along with
justification for change of designated
bank, name/ address of the society, copy of registration under FCRA, copy of fresh resolution of the executive committee
( in English or Hindi) for change of designated back account, certificate
from the proposed bank (copy of Bank
Pass Book is not acceptable) that the account is
being opened exclusively for FCRA, may be submitted to MHA. This form is available on website
http://mha.nic.in/fcra/forms/chng_bank_acnt.pdf
Q.48 Whether intimation regarding
the change of Members of the Executive Committee/Governing Council of the association is to be given to the
Government?
Ans. Yes. If
at any point of time, such change
causes replacement
of 50% or more of such Members
of the Executive Committee/Governing Council
of the association, intimation is to be given to
MHA within
thirty days of such change in
accordance with the undertaking & declaration given by the association in its application for registration or prior
permission, as the case may be. Further,
as per
the undertaking &
declaration, the association should not accept
any foreign contribution
except with prior permission till the permission to replace the office bearer(s)
has been granted
by MHA.
Q.49 What is the procedure
for filing Annual
Returns?
Ans. An association permitted
to accept foreign contribution is required
under law to maintain separate set of accounts and records exclusively for the foreign
contribution received and submit an annual return,
duly certified by a Chartered
Accountant, giving details of
the receipt and purpose-wise utilisation of the foreign contribution. The return is to be filed for every financial year (1st April
to 31st March) within a period
of nine months
from the closure of
the year
i.e. by 31st December each year. Submission of a ‘Nil’ return, even if
there is no receipt/utilization of foreign contribution during the year, is mandatory. The return is to be submitted, in prescribed
Form FC – 6, duly accompanied with the balance
sheet and statement of receipt and payment, which is certified by a Chartered Accountant.
The form is available on MHA’s
web-site – http://mha.nic.in/fcra/forms/fc-6.pdf For
further details, please refer to Sections 17, 18 and 19 of FCRA, 2010 and Rule 17 of FCRR,
2011.
Note: It may be noted that the annual
return for the financial year
2010 – 2011 was to be filed
by the 31st December, 2011 in
Form FC-3, i.e., as per FCRA, 1976.
Q.50 For how many years an association which has been granted
prior permission to receive
foreign contribution should file the mandatory
annual return?
Ans. 'Prior permission' is granted
to an association to receive a specific
amount of foreign contribution from a specific donor for a specific
purpose. After receipt
of approval from the Government, the association
should submit the mandatory return in FC-6 form for receipt and utilisation of the foreign contribution on a yearly
basis, till the amount of foreign
contribution is fully utilised. Even if no transaction
takes place during a year, a NIL return should be submitted.
Q.51 What are the offences and penalties under FCRA, 2010?
Ans. Section 11 of the FCRA, 2010 prescribes that no person,
save as otherwise provided in the Act, shall accept foreign contribution unless such person obtains a certificate of registration or prior
permission of the Central Government. Therefore, acceptance of foreign contribution without obtaining registration
or prior permission from
the Central Government constitutes an offence
under the Act and is punishable.
The provisions of FCRA, 2010 regarding offences
and penalties are ‒
Section 33: Making of false statement, declaration or delivering false accounts:
Any person, subject
to this Act, who knowingly, —
(a) gives false intimation under sub-section (c) of section
9 or section 18; or
(b) seeks prior permission or
registration by means of fraud, false representation
or concealment of material fact, shall, on conviction by a court,
be liable to imprisonment for a term which may extend to three years or
with fine or with both.
Section 34: Penalty
for article or currency or security obtained
in contravention of Section 10:
If any person, on whom any
prohibitory order has been served under section
10, pays, delivers, transfers or otherwise deals with, in any manner whatsoever, any article or currency
or security, whether Indian or
foreign, in contravention of such prohibitory order, he shall be punished with imprisonment for a term
which may extend to three years, or with fine, or with
both; and notwithstanding anything contained in
the Code of Criminal
Procedure, 1973, the court trying
such
contravention may also impose on
the person convicted an additional fine equivalent
to the market value of the article or the amount of the
currency or security in respect of which the prohibitory order has been contravened by him
or such part thereof as the court
may deem fit.
Section 35: Punishment for contravention of any provision of the Act:
Whoever accepts,
or assists any person, political
party or organisation in accepting, any foreign contribution or any
currency or security from a foreign
source, in contravention of any provision of
this Act or any rule or order made thereunder, shall be punished with imprisonment for a term which may extend
to five years, or with fine, or with both.
Section 36: Powers to impose additional fine where article
or currency or security is not available for confiscation:
Notwithstanding anything
contained in the Code of Criminal Procedure, 1973, the court trying a person, who, in relation to any
article or currency or security,
whether Indian or foreign, does or omits to do
any act which act or omission would render such article or currency or security
liable to confiscation under this Act, may, in the
event of
the conviction of such person for the act or omission
aforesaid, impose on such person
a fine not exceeding five times the value of the article or currency or security or one
thousand rupees, whichever is more,
if such article or currency or security is not available for confiscation, and the fine so imposed shall
be in addition to any
other fine which may
be imposed on such
person under this Act.
Section 37: Penalty for
offences where no separate punishment has been
provided:
Whoever fails to comply with any
provision of this Act for which no separate
penalty has been provided in this Act shall be punished with imprisonment for a term which
may extend to one year,
or with fine or with both.
Section 38: Prohibition of acceptance of foreign contribution:
Notwithstanding anything
contained in this Act, whoever,
having been convicted of any offence under section 35
or section 37, in so far as such
offence relates to the acceptance or utilisation of foreign contribution, is again convicted of such offence
shall not accept any
foreign contribution for a period of three years from the date of the subsequent conviction.
Section 39: Offences
by companies:
(1) Where an offence under this
Act or any rule or order made thereunder has been committed
by a company, every person who, at the time the offence was committed, was in
charge of, and was responsible to, the company for the conduct
of the business of the company,
as
well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly;
Provided that nothing
contained in this sub-section shall render
such person liable to any
punishment if he proves that the offence was
committed without his knowledge or that he had exercised all due diligence
to prevent the commission of such
offence.
(2) Notwithstanding anything
contained in sub-section (1), where an offence
under this Act or any rule or order made thereunder has been committed by a company and it is proved
that the offence has been committed with the
consent or connivance of, or is attributable to any neglect on the part of, any director,
manager, secretary or other officer
of the company, such director, manager, secretary or other officer shall also be deemed to be guilty
of that offence and shall be liable to be proceeded against and punished
accordingly.
Explanation – for the purposes of this section,‒
(a) "company" means
any body corporate and includes a firm, society, trade union or other association of individuals; and
(b) 'director" in relation
to a firm, society, trade union or other association of individuals, means
a partner in the firm or a members of the governing body of such society,
trade union or other association of
individuals.
Section 40: Bar on prosecution of offences under the Act:
No court
shall take cognizance of any offence
under this Act, except with the previous sanction of the Central
Government or any officer authorised by that
Government in this behalf.
Section 41: Compounding of certain offences:
(1) Notwithstanding anything
contained in the Code of Criminal
Procedure, 1973, any offence
punishable under this Act (whether committed
by an individual or association or any officer or employee thereof),
not being an offence punishable with imprisonment only, may, before the institution of any
prosecution, be compounded by such officers
or authorities and for such sums as the Central Government may, by notification in the official gazette,
specify in this behalf.
(2) Nothing in sub-section (1) shall apply to an offence committed by an individual or
association or its officer or other employee within a period of three years from the date on which a similar offence committed
by it or him was compounded under this section.
Explanation – For the purposes of
this section, any second or subsequent
offence committed after the expiry of a period of three years from the date on which the offence was previously compounded, shall be deemed to be a first offence.
(3) Every officer or authority
referred to in sub-section (1) shall exercise the powers to compound an offence, subject
to the direction, control
and supervisions of the Central
Government.
(4) Every application for the compounding of an offence
shall be made to the officer
or authority referred to in sub-section (1) in such
form and manner along with such fee as may be prescribed.
(5) Where any offence is compounded before
the institution of any prosecution, no prosecution shall be
instituted in relation to such offence,
against the offender in relation to whom the offence is so compounded.
(6) Every officer or authority
referred to in sub-section (1), while dealing
with a proposal for the compounding of an offence for a default in compliance with any provision
of this Act which requires
by an individual or association or its officer or other employee to
obtain permission to file or
register with or deliver or sent to, the Central Government or any prescribed authority any return account or other document,
may, direct by order, if he or it thinks fit to do so, any individual or association or its officer
or other employee to file
or register with, such return, account
or other document
within such time
as may be specified in the
order.
Q.52 Which are the offences
that can be compounded and what would
be the penalties therefor?
Ans: In terms of Gazette Notification S.O. 1976 (E) dated 26.08.2011, http://mha.nic.in/fcra/forms/ComOffNoti-260811.pdf the categories of offences that can be compounded under section 41 of
FCRA, 2010 and the quantum of penalty for compounding, as indicated against
each of the offences, are ‒
Nature of offence Quantum
of penalty (i)
Acceptance of cheque or draft
towards foreign contribution by a 'person'
without registration or prior permission of the Central Government even in cases where the cheque or draft has not been deposited
in a Bank by the 'person'. Rs. 10,000/- or 2
per cent of the foreign
contribution involved, whichever is higher.
(ii) Acceptance of cheque or
draft by a 'person' towards foreign contribution
without registration or prior permission of the Central Government and depositing the same in a Bank notwithstanding non-utilisation of the amount
of the foreign contribution. Rs.
25,000/- or 3 per cent of the foreign
contribution involved, whichever
is higher.
(iii) Acceptance of foreign
contribution by a 'person' without registration
or prior permission of the Central Government and utilisation of the same notwithstanding any inquiry which revealed that the contribution received was not
diverted towards any purpose other than the objectives or purpose for which the same was received, utilisation of the contribution was as per the objectives of receipt
of the same and records of receipt and utilisation have been kept properly.
Rs. 1,00,000/- or 5 per cent of the foreign contribution involved, whichever is higher.
(iv) Acceptance of foreign
contribution in kind by a 'person' without registration
or prior permission of the Central Government
notwithstanding that nothing adverse was reported after inquiry. Rs. 10,000/-
or 2 per cent of the foreign
contribution involved, whichever
is higher.
Q.53 How to apply for compounding of an offence
under FCRA, 2010?
Ans: An application for the
compounding of an offence under section 41 is to be
made to the Secretary, Ministry
of Home Affairs,
New Delhi on a plain paper
along with a fee of Rs.1000/- (One Thousand
only) in the form of a demand draft or a banker’s
cheque in favour of the “Pay and Accounts Officer,
Ministry of Home Affairs”, payable
at
New Delhi.
Q.54 What happens after an offence
is compounded?
Ans: After
payment of the penalty imposed and compounding of the offence, the person may be granted registration or prior
permission, as the case
may be, subject to its fulfilling all parameters.
Q.55 What if the person
is unwilling or unable to pay the penalty imposed?
Ans: In the
event of failure to pay the penalty, for whatever reason, necessary action for prosecution of the person
shall be initiated.
Q.56 Which are the investigating agencies for investigating and prosecuting a person for violation of FCRA?
Ans. In terms of Gazette
Notification S.O. 2446 (E) dated 27.10.2011,
The Central Bureau of Investigation or the investigating agencies (Crime
Branch) of the State Governments, cause of action
which arises in their respective States, are the designated agencies
for investigating and prosecuting a person for violation of FCRA.
Q.57 Can the Government cancel
the certificate of registration granted to a person under
FCRA?
Ans. Yes. The conditions for cancellation of certificate, as prescribed under section 14 of FCRA, 2010
are ‒
14 (1) The
Central Government may, if it is satisfied after making such inquiry as it may deem fit, by an order, cancel the
certificate if —
(a) the holder of the
certificate has made a statement in, or in relation to, the application for the grant of registration or renewal thereof, which is incorrect or false; or
(b) the holder of the certificate has violated any of the terms and conditions of the certificate or renewal thereof; or
(c) in the opinion of the
Central Government, it is necessary in the public
interest to cancel the certificate; or
(d) the holder of the certificate has violated any of the provisions of this Act or
rules or order made thereunder.
(e) if the holder of the
certificate has not been engaged in any reasonable activity
in its chosen field for the benefit
of the society for two consecutive years or has become defunct.
14 (2) No order of cancellation of certificate under this section
shall be made unless
the person concerned has been given
a reasonable opportunity of being heard.
14 (3) Any person whose
certificate has been cancelled under this section
shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of such certificate.
Q.58 Can the Government suspend
the certificate of registration granted
to a person under
FCRA?
Ans. The conditions for
suspension of certificate, as prescribed under section
13 of FCRA, 2010 are
‒
13(1) Where the Central
Government, for reasons
to be recorded in writing, is satisfied that pending
consideration of the question of cancelling
the certificate on any of the grounds mentioned
in
sub-section (1) of Section, 14, it
is necessary so to do, it may, by order
in writing, suspend the certificate for such period not exceeding one hundred
and eighty days as
may be specified in the order.
13(2) Every person
whose certificate has been suspended
shall ‒
(a) not receive any foreign
contribution during the period of suspension of certificate:
Provided that the Central
Government, on an application made by such
person, if it considers appropriate, allow receipt of any foreign contribution by such person on such terms
and conditions as it may specify;
(b) utilise, in the prescribed manner, the foreign
contribution in his custody with the prior approval of the Central
Government.
In terms of Rule 14 of the Foreign
Contribution (Regulation) rules, 2011, the unspent amount
that can be utilised in case of suspension of a certificate of registration may be
as under: -
(a) In case the certificate of registration is suspended under
sub-section (1) of section 13 of the Act, up
to twenty-five per cent
of the unutilised amount
may be spent, with the prior approval
of the Central Government, for the declared aims and objects for
which the foreign contribution was received.
(b) The remaining seventy-five
per cent of the unutilised foreign contribution shall
be utilised only after
revocation of suspension of the certificate
of registration.
Q.59 Can an organization, whose violation under
FCRA, 1976 has been condoned, apply for registration/prior permission?
Ans. After the violation
committed by an association has been condoned, the association can apply for prior permission (PP) only by submitting
an application in form FC-4 http://mha.nic.in/fcra/forms/fc-4.pdf. Once
the PP has been granted and foreign
contribution received for specific purpose has been fully/partially utilized and organisation has submitted annual
FC-6 http://mha.nic.in/fcra/forms/fc-6.pdf returns
and accounts in prescribed format
pertaining to the PP, it becomes eligible for
consideration of registration under FCRA. Registration would be granted under FCRA, if other parameters
are fulfilled by the association.
Q.60 What is the status of the applications submitted under the repealed FCRA, 1976 but have
not been disposed of?
Ans. In terms of Rule 9(5) of
FCRR, 2011, every application made for registration or prior
permission under FCRA, 1976 but not disposed
of before the date of
commencement of these rules, i.e., 01.05.2011,
shall be deemed to be an application for registration or prior permission, as the case may be, under
FCRR, 2011 subject to the condition
that the applicant furnishes the prescribed fees for such registration or prior permission, as the case may
be.
Q.61 Whether the registration
certificate or prior permission granted under the repealed FCRA, 1976 shall remain valid when FCRA, 2010 has come into force?
Ans. Yes. An association granted prior permission or registration
under the repealed FCRA,
1976 shall be deemed to have been registered or granted prior permission, as the case may be, under FCRA, 2010.
Registration granted
under FCRA, 1976 shall remain
valid for a period
of 5 years from the 1st May, 2011, i.e., up to the 30th April, 2016.
Q. 62 Whether prior permission granted
under FCRA, 1976 would also remain
valid for next 5 years from the 1st May, 2011, i.e., the date when FCRA, 2010 came into force?
Ans. Prior permission granted
under FCRA, 1976 as also under FCRA 2010 remains
valid till receipt and full utilisation of the amount of FC
for which the permission was/is
granted.
Q.63 Whether the certificate of registration is to be renewed and what is the
procedure for such renewal?
Ans. Section 16 of FCRA,
2010 and Rule 12
of FCRR, 2011 may please
be seen in this regard.
Q.64 When should an Association which has been granted registration under FCRA, 1976 should apply for
renewal of registration?
Ans. In terms of Rule 12 (2)
of FCRR, 2011, an Association registered
under FCRA should apply in Form FC-5 for renewal of its registration six months before the date of expiry of the
certificate of registration. Since registration granted to Associations under the repealed FCRA, 1976 shall be valid up to
30th April, 2016, such Associations
should apply for renewal of their registration on or before 1st November, 2015.
An Association granted
registration under FCRA, 2010, i.e., after 1st
May, 2011, shall have to apply for renewal of registration six months before the date of expiry of the
validity of its certificate of registration.
Associations implementing an ongoing multi-year project should apply
for renewal twelve months before the date of expiry of the certificate of registration.
Q.65 What is foreign hospitality?
Ans. Foreign Hospitality means any offer,
not being a purely
casual one, made in cash
or kind by a foreign source
for providing a person
with the costs of travel to any foreign country or territory or with free board,
lodging, transport or medical treatment.
Q.66 Who cannot accept foreign
hospitality without prior approval of the
Ministry of Home Affairs?
Ans. Section 6 of FCRA, 2010 prescribes that "No member
of a Legislature or office
bearer of a political
party or Judge or
Government servant or employee
of any corporation or any other body owned
or controlled by the Government shall, while visiting any country or territory outside India,
accept, except with the prior permission of the Central
Government any foreign
hospitality.
Provided that it shall not be necessary to obtain any such
permission for an emergent
medical aide needed on account
of sudden illness
contracted during a visit outside India, but, where
such
foreign hospitality has been
received, the person receiving such hospitality shall give, within one month from the date of receipt of such
hospitality an intimation to the Central Government as to the receipt
of such hospitality, and the source from which, and the
manner in which,
such hospitality was received
by him."
Q.67 Whether approval of the
Ministry of Home Affairs is required in cases where the proposed
foreign visit is being undertaken by a person
in his/her personal
capacity and the entire expenditure thereon is being met
by the person concerned?
Ans. No. Any person belonging to any of the categories
specified in Section 6 of FCRA, 2010 would require
such approval only if the
person concerned is seeking foreign
hospitality from a foreign source.
Q.68 How one can seek permission of the Government for receiving foreign
hospitality?
Ans. Application form (Form FC-2)
for this purpose
is available
on MHA’s web-site – http://mha.nic.in/fcra/forms/fc-2.pdf. In
terms of Rule 7 of FCRR, 2011:
(i) Every application for acceptance of foreign hospitality
shall be accompanied by an invitation letter from the host or the host country,
as the case may be, and administrative clearance of the Ministry or department concerned in case of visits sponsored by
a Ministry or department of the
Government.
(ii) The application for grant of
permission to accept foreign hospitality must reach the appropriate authority
ordinarily two weeks
before the proposed date of
onward journey.
(iii) In case of emergent medical
aid needed on account of sudden illness during
a visit abroad,
the acceptance of foreign hospitality
shall be required to be intimated
to the Central Government within sixty
days of such receipt giving full details including the source, approximate value in Indian Rupees, and
the purpose for which and the manner in which
it was utilized.
Provided that no such intimation is required if the value of such hospitality
in emergent medical aid is up to one lakh rupees or equivalent thereto.
*****
Foot Note:
For applicants who are
individuals, the criteria of registration under Societies/Trust Act
will not be applicable.
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