Dear Members,
I would like to know whether a FCRA Registered social organisation can by Ultra Sonography Machine(USG machine) with foreign donation and can offer that USG machine to a health center needed most run by a Charitable Trust which is not registered under FCRA.
Please help me to know detail proceedings.
With best regards.
Samir Kr. Halder
But an old machine can be disposed off against reasonable payment. Machines do impair.
As per Explanation 1 to Section 2(1)(h) the definition of Foreign Contribution includes:
“Explanation 1 – A donation, delivery or transfer of any article, currency or foreign security referred to in this clause by any person who has received it from any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.”
Hence, in your case, the article (i.e. machine) that you have purchased from FC fund cannot be transferred to an organisation which do not have FCRA registration.
Dear Samir,
The asset is purchased from FC funds and the ownership cannot be transferred to unregistered organization. The machine can be run by the FCRA registered organization in the intended location. Separate books of account can be maintained for the receipts and payments of the same. Any surplus from the running of the machine should be reflected in annual returns.
Thanks and regards,
B V Soma Sastry
No. You cannot transfer it to a Non FCRA Registered organization. You can run the machine yourself.
Rakesh Mittal
There is another point to it. The purchase of the machine should have been in the project proposal approved by the donor. That is, it should be part of the purpose for which the FC was received. Otherwise FCRA department will construe the purchase of the machine as deviation from the purpose for which the FC was received.
No nothing can be handed over to an unregistered organisation, in the form of donation or grant. Since the machine procured from FCRA funds will be treated as Foreign Contribution.
However, if the FCRA entity, decides to run a Ultra Sound Centre from such a place, where FCRA entity would remain responsible for running the machine. Its income & expenditure is accounted in the FCRA books of the FCRA entity.
Or it could even give the machine on hire to another entity, with proper agreement. Machine ownership would remain with the FCRA entity. It would be just like a building constructed from FCRA money, but given on rent to different agencies.