Dear Members,
I have a query under Foreign Contribution (Regulation) Act, 2010.
A company whose business is to provide low cost greenhouses to small and marginal farmers has received grants from a foreign Bank. The nature of the amount received is in the form of ‘Grants’ and therefore, no consideration has been provided by the Indian Company to the Grantor.
Please clarify if the above would require the approval or prior permission under Foreign Contribution (Regulation) Act, 2010.
Appreciate your inputs in this regard.
Regards, Ranjitha
I believe you don’t need a FCRA if the foreign agency transfers the money to its Indian branch or subsidiary and this branch/subsidiary then transfers the money to you in Indian currency. This is even when the contract comes from the foreign agency/company. I am no expert but I am speaking out of experience
Can you clarify is the foreign bank giving grant as a ‘CSR Grant’ ? Is it registered in India as bank, because in India a Bank needs to be registered under Banking Regulation Act 1949 and hence not covered under CSR legislation. If it is a ‘foreign bank’ is it at all registered in India, because most foreign banks who are operating in India have to be registered in India, wither with RBI or under specific legislation.
Also you need to clarify, are you a for profit business, which is providing these low cost greenhouses at low margin, but are not free, i.e. are ‘you’ basically doing trading. Kindly clarify.
Yes. It doesn’t matter whether the receiver in India, is a company or trust or NGO. Since you have mentioned that it is a grant (foreign contribution) from a foreign source, you should either have FCRA registration or take prior approval.
For receiving the grant from foreign source, you should have permission under FCRA. If you are a for profit company, then you will also be taxed for that amount by IT department.