Dear Members,
Greetings from SRRF!!!
Responding to several requests for Earthquake Relief to Nepal, CBDT has come forward in fast tracking the procedure for giving approval for any NGOs wanting to spend money in that country. Vide a press release CBDT has promised to give approvals within 2 days. Normally the process is quite a long one and takes anywhere from 3-4 months.
All those NGOs interested may contact CBDT website for the procedure to be followed. We have also provided copy of instructions on our website at following link:
http://srr-foundation.org/circulars/permission-under-section-11-1-c-28-04-2015.pdf
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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org
Does CSR comes under RTI Act ?
Thanks for the welcome! you are right one need CBDT approval for spending outside India but that is for making the spend not taxable. However, FEMA governs remittances outside India and as per schedule III of “RBI/2014-15/10
Master Circular No. 6 /2014-15 July 1, 2014
(Updated as on November 21, 2014)
Master Circular on Miscellaneous Remittances from India –
Facilities for Residents”. We need to be sure of the same and obtain RBI approval for going beyond the limit. If we are just sending material bought in India and sending as relief that may not be covered since there is forex involved. Can you please also check th circular for the benefit of larger community. We are not doing any remittance but still we have RBI clearance. Further, one need to check their bylaws/MOA since the standard clause says objects extend to whole of India, so approval from once board is also required.
Sending relief material doesn’t entail any FEMA issue. FEMA ‘generally’ applies only when there is an inward or outward remittance.
I am of the view that corporates cannot remit amount to Nepal under schedule III of FEMA (Misc Remittances) Regulations. Referred regulation reads thus,
4(ii) Donations by Corporate, exceeding one per cent of their foreign exchange earnings
during the previous three financial years or US$ 5,000,000, whichever is less, for:-
(a) creation of Chairs in reputed educational institutes,
(b) to funds (not being an investment fund) promoted by educational institutes; and
(c) to a technical institution or body or association in the field of activity of the donor
Company.
Please read ‘FEM (Current Account Transactions) Rules 2000’ instead of ‘FEMA (Misc Remittances) Regulations’
Mr Matta, ‘FEM (Current Account Transactions) Rules 2000′ you refer to are applicable to only those transactions where funds being withdrawal are in foreign currency. However if donations are being given in ‘local currency’ or ‘in kind’ donations then these rules will not be applicable.
However just to clarify when we talk of CBDT approval, it is basically for NGOs to get necessary tax benefit for any funds applied outside India. This is must, since S.11 only applies to application of funds in India. What Rajeev referred to was donation by corporates out of their foreign earned funds, which they would be permitted but no tax deduction would be available on the same.
As per Schedule III of said Rules (remittance under FEMA), a corporate can donate 1% of their foreign exchange earnings during the previous three years or USD 50,00,000/- whichever is less. Please note that for any amount exceeding said limit, permission is to be obtained from the RBI.
Welcome Rajeev on SRRF Dialogue. This is an important information for corporates on how much they can contribute without specifically going to RBI or CBDT.
However it must not be equated with NPOs. Since NPOs are governed by S.11 under Income Tax Act, they have to go to CBDT before spending any funds outside India.
Thanks Mr Chattopadhyay for your advice.
While he also agrees that FCRA Act does not have a provision if funds once received in India can be sent outside the country. However as he says it will be wise to take FCRA permission or at least inform the Dept about your intentions alongwith copy of CBDT permission.
While there is no specific mention in FCRA, 2010 about utilising FC abroad, it can be construed from various sections of the Act that FC is to be utilised for a definite, cultural, economic, educational, religious or social programme for the benefit of the society within the country. In its website MHA has also given a detailed list of permissible activities under each of the aforesaid programmes. Therefore, organisations desirous of utilising the FC received by them for helping the earthquake victims of Nepal, either with relief materials procured with FC or by providing monetary help with the FC, should take permission from MHA (FCRA Wing). They should seek exemption under Section 50 of FCRA, 2010 for utilising a part of their FC at Nepal for the distressed people of that country. Such exemption can be granted by the Hon’ble Home Minister. A number of FCRA registered organisations have already applied and I’m sure that such exemption would be given for this humitarian cause.
Thanks for sending this information as we are trying to get this but cant succeed.
Dear , Do we have to take permission from MHA under FCRA regulation in assistance for thr Nepal victims , if yes what are the formalities for that,please guide us.
Thanks
Shekhar
sahyog care for you
While there is no legal requirement under FCRA for taking permission from FCRA. FCRA Act only talks of receipt and utilisation of funds and reporting of the same under FC6. It no where talks of sending remittances outside India. However considering FCRa’s current practice, it may be prudent to intimate FCRA about this alongwith the permission granted by CBDT under S. 11 (1) (c).
When we try to implement the projects in Nepal what are the formalities.
Dear experts,
I have a question about Nepal Earthquake Relief project that we have approx 500$ in our FC Account and we want to send food, stuff, blanket for Nepal Earthquake victim. we will purchase the material, food stuff etc. from India and will send to Nepal but in this case we’ll need some kind of permission? please give us complete details about permission..
Dear
Article for Nepal relief can be send to Nepal embassy at Delhi with prior permission from the embassy and embassy people will take it further.Prior permission is require because with list of articles because they want to know it for the sake of space and transport facilities.We have done it.
Thanks
SCPandey
I think issue has been discussed in quite detail. No NGO can spend funds for Nepal, (whether in cash or in kind) without CBDT permission. If you do legally Income Tax authorities can disallow this expenditure while doing your assessment. Of course, if you have collected goods and sent them directly without routing through your books of accounts, then it is not official and there is a different matter.