A new Rule 6A has been inserted giving financial limit of Rs 25,000/- for ‘articles rec’d from foreign source’. Remember earlier under FCRA 1976 this limit was upto Rs 1000/-, under the FCRA 2011 rules this limit was omitted. Now this has been corrected. But please note that the new limit of Rs 25,000/- is applicable only for those articles which are given to persons for personal use. I interpret this as articles given to individuals for personal use. Likely to cover persons who could be using Foreign Hospitality. If NGOs receive any articles in normal course, this limit would not be applicable.
TRANSFER OF FOREIGN CONTRIBUTION TO OTHER ENTITIES
Rule 24 has now been replaced with a new one as follows.
“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.
(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
(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.”
Transfer of FC to Unregistered Entities
Earlier rule requiring DM’s approval by unregistered NGOs before funds could be transferred has been dropped. But an undertaking has to be given by the transferor agency that the total amount proposed to be trfd. to such unregistered agencies are less than 10% of total FC that the transferor agency has rec’d and that it will not transfer funds without receiving necessary approval from the FCRA Dept.
Transfer of FC to registered / prior permission agencies
Clarification issued by the Dept. that registered entities need not take prior permission from the dept. before transfer of funds to other registered / prior permitted entities (see letter on SRRF website
http://srr-foundation.org/workshop/16_June_11/Clarification_Rec’d.pdf ) has now been formalized by amending the necessary rules. However the burden of ensuring that the recipient organisation is not being proceeded against still remains with the transferor agency. Hence please ensure that you continue to take undertakings for the same.
An additional requirement under Rule 24(4) has been put in place, which states that both transferor and recipient would be responsible for ensuring that funds are properly utilized and are reported under Form FC-6 (i.e. annual return) both by transferor and recipient. There is some confusion if the unregistered entity is required to file annual return and exactly whose annual return (i.e. transferor or recipient) would include this as utilization of Foreign Contribution.
Source : Foreign Contribution (Regulation) Amendment Rules, 2012