Foreign Technical Services contract using a Grant

Couple of questions –

– Can a FCRA “Grant” be used for “sub-contacting” with an international for profit or not for profit entity, after complying with TDS and service Tax requirements? This could be a FTS contract.

– Can a local “Grant” be used for “sub-contacting” with an international for profit or not for profit entity, after complying with TDS and service Tax requirements? This could be a FTS contract.

​Thanks,

Rajesh​


RAJESH ARYA :: OPERATIONS DIRECTOR
JOHN SNOW INDIA PRIVATE LIMITED
B-6-7/19, SAFDARJUNG ENCLAVE,
DDA LSC, NEW DELHI – 110029, INDIA

This entry was posted in FCRA, TAX, LEGAL. Bookmark the permalink.

6 Responses to Foreign Technical Services contract using a Grant

  1. Rajesh Arya says:

    Thank you. Could you take this discussion off please?

  2. deepak bansal says:

    Further to stated earlier, let me put an example:
    If a grant / donation is used to import goods/ merchandise for ultimate distribution to destitutes , poor people in India , it would be treated as application of income. Similarly , if an amount is used to travel abroad to garner resources or hold meetings or make presentation to the donors, it would be having no problem either in FCRA or in ITA1961. But if an international agency is hired for delivering technical services, whether it would amount to application outside India or not, would be a substantive matter to be decided.

  3. deepak bansal says:

    Firstly let us discuss whether a Pvt Ltd . Company can receive donations or grants , local or Foreign . In this connection , let us add that companies are not barred by Companies act 1956 or 2013 to accept donations , provided the MOA authorises such acceptance. I am adding a case of a MLM company regd recently which , has one of the objects , being accept of donations , grants etc. Now when MOA allows the acceptance of donations, FCRA may become applicable even if the company can claim that its definite agenda is not social , economic or ………but profit making.

    In that case, FCRA permission is necessary.

    Now once a Pvt. ltd. company is eligible to accept FCRA amounts , usage of such
    amounts for carrying out FTS whether thru an INTERNATIONAL OR LOCAL PROFIT MAKING OR NON PROFIT MAKING , becomes non – relevant. For entering into such contracts , IT provisions become more relevant where application of income is discussed.

  4. Dr. Neeraj K Sinha says:

    FCRA “Grant” be used for “sub-contacting” with an international for profit organization, but for not for profit entity should have FCRA certification,

    Local “Grant” be used for “sub-contacting” with an international for profit or not for profit entity if they have permission to do business in India

  5. The information given is too little to offer any meaningful comment. However, on the basis of information provided it may be said that it all depends upon the terms of the FCRA or domestic grant. If there is nothing in the terms of the grant to prohibit application of grant for FTS services, it can be done. The RBI’s permission may be required which would depend upon the quantum of amount involved.

  6. s.srinivasan says:

    There is no bar on payments for getting the work done, which is part of the work of an NGO

Comments are closed.