Our organization is a trust registered under Foreign Contribution (Regulation) Act 2010.
We received funding from an organization outside India for a specific project. Actual expenditure was less than projected, and the said organization outside India requires that all unutilised fund needs to be returned by us to that organization in USD. We have the entire project account Audited by an External Auditor.
We approached our Banker for the refund, but they advised us to seek prior approval from the Ministry of Home Affairs (MHA).
Our query here is that we are refunding unutilized amount of foreign remittance to the same organization from which we have received it, in this case do we need to seek special approval from MHA. What can be the best way to process this earliest possible as per applicable laws.
Best
Amit
Amit K. Tripathi
Director
Ananta Aspen Centre
Why at all this wasteful intellectual analysis and testing legal acumen.Please just contribute to another FCRA organisation. A Donor as such asking back is highly hypothetical, in normal times. They may ask you to transfer to another organisation
Please find below the procedure (relevant extract) to transfer the FC money to another recipient which essentially means it’s quite difficult not only to transfer within India to another registered entity but all the more difficult to remit back to originating country/donor (may be impossible).
Source – http://www.fcraforngos.org/pdf/FC-rules2011.pdf
[PUBLISHED IN THE GAZETTE OF INDIA,PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF HOME AFFAIRS New Delhi, dated the 29th April, 2011 Notification
24. Procedure for transferring foreign contribution to other registered or unregistered persons. – (1) Any person intending to transfer the foreign contribution may make an application to the Central Government in Form FC-10. (2) The Central Government may permit the transfer in respect of a person who has been granted the certificate of registration or prior permission under section 11 of the Act, in case the recipient person has not been proceeded against under any provision of the Act. (3) Any transfer of foreign contribution shall be reflected in the returns in Form FC-6 as well as in Form FC-10 by the transferor and the recipient. (4) In case the foreign contribution is proposed to be transferred to a person who has not been granted a certificate of registration or prior permission by the 19 Central Government, the person concerned may apply for permission to the Central Government to transfer a part of the foreign contribution, not exceeding ten per cent, of the total value of the foreign contribution received. The application shall be countersigned by the District Magistrate having jurisdiction in the place where the transferred funds are sought to be utilised. The District Magistrate concerned shall take an appropriate decision in the matter within sixty days of the receipt of such request from the person. The donor shall not transfer any foreign contribution until the Central Government has approved the transfer. [F. No. II/21022/10(1)/2010-FC-III] (G.V.V. SARMA) Joint Secretary to the Government of India.
FORM FC –10
[See rule 24 (1)]
The Secretary to the Government of India,
Ministry of Home Affairs,
FCRA Wing / Foreigners Division,
“Jaisalmer House”,
26, Mansingh Road,
New Delhi – 110 011.
Subject: Application for seeking permission for transfer of foreign contribution to other registered/unregistered persons:
Sir,
I _____________________________, on behalf of the Association named hereafter apply for
seeking permission of the Central Government under section………….of Foreign Contribution
(Regulation) Act, 2010 (42 of 2010) for transfer of foreign contribution to other registered/un-registered
persons, as per details given below:
1. Details of the applicant/ transferor association:
(a)Name:
(b)Address:
Town/City:
District:
State:
Pin Code:
(c) Telephone No. of the Association (with STD code):
(d) Telephone no. (with STD code) / Mobile no. ~ of the Chief Functionary:
(e) e-Mail address:
(f) Registration certificate/Prior permission order details:
(i) Registration No. (Under FCRA):
(ii)If not registered under FCRA, prior permission order no. with date:
(Certified copy of the registration certificate/prior permission order to be attached)
2. Details of the recipient /transferee association:
(a)Name:
(b)Address:
Town/City:
District:
State:
Pin Code:
(c) Telephone No. of the Association (with STD code):
(d) Telephone no. (with STD code) / Mobile no. ~ of the Chief Functionary:
(e) e-Mail address
(i) Whether registered under the Foreign Contribution Regulation Act, 1976 (49 of 1976) : yes/no
(a) if yes, details thereof ( registration no., date of registration):
(certified copy of the registration certificate to be attached)
(b) If no, furnish the details if it is registered under the Indian Trust Act 1882 (2 of 1882) or the
Societies Registration Act 1860 (21 of 1860) or the Companies Act 1956 (1 of 1956).
(a) Registration number:
(b) Place of registration:
(c) Date of registration:
(certified copy of the registration certificate to be attached).
48
(d)PAN No., if any:
3. Amount of Foreign contribution to be transferred:
4. Mode of the proposed transfer of foreign contribution (cash/cheque/electronic etc):
5. Bank details and account no., in which FC is proposed to be transferred:
(i) Account No. :
(ii) Name of the Bank:
(iii)Address:
6. Any other information which the Association may like to furnish:
I hereby declare that the information furnished above is true and correct.
Signature of the Chief Functionary
[Name of the Chief Functionary in block letters]
(Seal of the Association)
Hope this helps.
Rajeev
This is an old Rule, it has since been replaced. It was for transfer to other registered / non-registered NGOs. Query raised is how to transfer it back to donor.
Hi Amit,
This is one of the situation, which really has been made complicated by unnecessary interpretations and needless approaching FCRA Dept. Soma has referred to a very appropriate discussion that SRRF Dialogue members had long back in 2013.
There is no specific provision in the FCRA Act for refund of FCRA contribution. Recently an agency wishing to refund FCRA funds to a foreign donor, approached FCRA Dept for granting permission for the same, . The FCRA Dept wrote back stating that there is no such provision in the Act for refund of FCRA funds. The Dept is right that there is no provision in the Act or Rules. Infact if one looks at the FCRA Act 2010, the preamble clearly talks of acceptance & utilisation of funds. It does not cover refund of foreign contribution, which invariably has to be in Foreign Currency. This aspect is well covered under FEMA and nodal agency is RBI. Thus if funds are to be returned, why unnecessarily approach FCRA Dept, just go to the bankers and fill up the necessary Form (A2) and indicate the reason for payment in foreign currency. No one will give you permission since it is not their in the Act. It is possible that some overzealous FCRA officer may raise objections, deal with it as any wrong action of the Dept is dealt with. Respond to it or if required go to the court.
Dear Amit,
Please refer to the below mentioned link. I hope you will definitely get some clarity on the issue.
http://blog.srr-foundation.org/?p=1573
Thanks & Regards,
B V Soma Sastry
Dear Mr Amit,
It is not expressly mentioned in the Act that FC cannot be returned to
donor.
However, as per Act, foreign funds can be transferred only to an FC registered organisation. So the interpretation is that since the donor organisation
outside India is not an FC registered organisation, FC funds cannot be transferred
to them.
Since the Act doesn’t envisage this situation, there are no provision addressing this. Seeking approval from MHA could be a way out.
Best Regards,
Ritesh
They have never approved it.