Consultancy by FCRA Registered organization to Non-FC NGOs

Dear Friends,‎

Season’s Greetings from Hyderabad!‎
Please clarify latest position on FCRA certified NGOs giving consultancy contracts / paying ‎service/consultancy fee to non-FCRA certified NGOs.‎

For ready reference: ” any fee / consultancy charge out of foreign funds received by FCRA ‎registered NGOs paid for services to non-FCRA NGOs is not treated as foreign contribution fund. ‎Pl refer to FCRA 2010, page 3, explanation 3″.‎

Please confirm validity of such a provision as of now.‎
Thanks,‎
Udayashankar

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One Response to Consultancy by FCRA Registered organization to Non-FC NGOs

  1. Subhash Mittal says:

    Udayshankar ji, apologies in delay in responding. Could you share, where exactly the quote you have take from. In case it is from the FCRA Act, Explanation 3 reads as follows:
    Explanation 3.– Any amount received, by any 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 of a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution within the meaning of this clause;

    No where does it talks of consultancy charge. However if the concerned NGO provides consultancy as its ordinary course of business, than yes, what you interpret that such an NGO can take foreign funds even without FCRA registration. Problem is that in absence of legal precedents, FCRA is being ruled more by whims and fancies of FCRA officers, making their interpretations very adhoc. In such an environment, I would suggest not to transfer any funds to a non-registered NGO, unless permission taken under Rule 24.

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