Latest Amendments in FCRA Rules & Forms – 2

This amendment has been brought to further tighten the rules and reporting Forms. The changes are applicable from the date of publication in the Gazette.

In yesterday’s post, topics of Key Functionaries and applicability of FCRA towards For-Profit entities were covered.

In today’s post, issue relating to Project-wise disclosure of Purpose & Geographical Areas where projects are being implemented is being covered.

Purpose

• Govt has come out with a detailed schedule of 105 predefined categories covering Religious (16), Cultural (18), Economic (19), Educational (22), Social (30). A NPO desirous of registration under FCRA would need to select one or more of them in its application.
• The purpose as selected in its application would be specified in the FCRA registration certificate. Even current FCRA registered entities would need to comply with this requirement, within oneyear.
• In effect, above means, that if a NPO’s activities as covered in grants do not get covered within the purpose / activity specified in its registration certificate. It will need to apply for amendment. For this purpose, Govt has formulated a Form FC-6F. This will become quite an onerous responsibility, and in case delays are experienced as generally is the trend at FCRA, a major bottleneck.

Geographical Area

• Similar to as mentioned under Purpose above, all NPOs would need to ensure that the State in which they plan to undertake activity is mentioned in their Registration Certificate.
• A fee of Rs 300/- per state has been affixed for the same.

Consequences of above requirements

• Concern is, would this become a basis for some form of objection or even penalty, if the state covered in the FCRA Registration certificate is not included in the byelaws of the NPO.
• Please note ensuring geographical location in FCRA registered entity is important, since this information is also being sought in Annual Return (FC4), when Project-wise information (para 3(a)) and location of assets (para 3(ba)) & 3(bb)) is being asked for.
• Proposed Rule 17B (3) gives right to Govt to reject or approve the application after undertaking such inquiry as it deems fit.
• It is foreseen that this could become a basis of number of disputes and penal provisions by the Dept.

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