Socio Research & Reform Foundation

The Government of India has taken a historic decision to reduce the rate of contribution under the ESI ‎Act from 6.5% (4.75% +1.75%) to 4% (3.25%+0.75%). Employers’ contribution being reduced from ‎‎4.75% to 3.25% and employees’ contribution being reduced from 1.75% to 0.75%. Reduced rates will be ‎effective from 01.07.2019. This would benefit 3.6 crore employees and 12.85 lakh employers.‎

The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate ‎further enrollment of workers under the ESI scheme and bring more and more workforce into the ‎formal sector. Similarly, reduction in the share of contribution of employers will reduce the financial ‎liability of the establishments leading to improved viability of these establishments. This shall also lead ‎to enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall ‎lead to improved compliance of law.‎

The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability ‎and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by ‎Employees’ State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the ‎contributions made by the employers and the employees.‎

Under the ESI Act, employers and employees both contribute their shares respectively. The ‎Government of India through Ministry of Labour and Employment decides the rate of contribution ‎under the ESI Act. ‎

The Government of India in its pursuit of expanding the Social Security Coverage to more and more ‎people started a programme of special registration of employers and employees from December, 2016 ‎to June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in ‎a phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000/- per month to Rs. ‎‎21,000/- from 01.01.2017.‎
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Socio Research & Reform Foundation (NGO)
‎512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008‎

Dear Friends,‎
FCRA allows FDI NOT FOR PROFIT.‎

Foreign fund through NGOs is FDI for poverty alleviation through development and jobs without ‎profit motive.Hence FCRA rules and regulations should enhance ease of doing development work ‎aimed at alleviating poverty. Related laws of the land should be strictly enforced to prevent and ‎detect punishable practices without draconian elements. But the new powers conferred on Income ‎Tax Commissioners drastically reduces ease of alleviating poverty and adds draconian dimension to ‎monitoring of NGOs, vide the News Papers : https://timesofindia.indiatimes.com ‎

Udayashankar

Dear Member,

My company is desirous to open a trust / foundation.

The main objective will be to procure and pass on grants/donations to women who are engaged in the manufacture of carpets.

This foundation will then procure those carpets and sell them to my parent company.

My question is:

1. What is the difference between Trust and foundation and which would be suitable for the proposed activities?
2. Can a trust or foundation do the above mentioned activities?
3. What will be requirements of opening a trust and foundation respectively? Are there any special areas in India where it is beneficial to open a Trust or foundation (Tax concessions, ease of obtaining grants)
4. From a statutory prospective what kind of statutory compliances will be needed to be done by my company ( Eg applicability of Contract Labour Act, MW Act, etc)
5. Finally we want to brand the produce of the carpets manufactured by the women such that it should promote the brand image of my parent company  and also highlight the CSR activities being done by my company through the trust. Can this be done too?

Please clarify my doubts

Thanking You

Anuradha Grewal

As many of you know that FCRA Dept has come out with a public notice requiring all NGOs who are registered under FCRA or have prior permission to update details of its office bearers/key functionaries online by 7th July 2019. While earlier this updation was required only when more than 50% of the Board was changed, however latest Notice requires that it should be updated within 15 days of the change. While many NGOs tried to update the same, however it was found that the NGOs could not update it, if the change was less than 50%.

However you have to now be a bit more innovative or should we say jugadu, that famous Indian characteristic to get inside the Form FC6. First all go to FCRA Home Page and select Online Forms. Or you could directly click on the link https://fcraonline.nic.in/Home/fcra_onlineform.aspx to reach online Forms. Choose Form 6E. Question will be asked is change more than 50%, lie a bit and say No, choose option Yes (even if not applicable in your case), otherwise you cannot enter Form 6E. Once you say yes, Bingo, you will be able to access the Form 6E.

Once you enter Form 6E after login, the very first screen appears will be of Existing Key Members. This screen shows the registration details along with current key members list, alongwith their particulars. Scroll down to the page till the question “is there change in original key members” and select option “Yes”. Also fill up the communication details and click on Update Data. Now you able to navigate to the next screen i.e. Change of Key Members. Here you have to update member details.

If the member listed is no longer on your Board, choose DELETE Option. If the person concerned’s particulars are to be changed, use EDIT option. If a new member is to be added, choose ADD option.

Once the Form is updated, verify and authorize the Form by attaching signature File of authorized signatory. Normally authorized signatory would be Chief Functionary. Also attach the file of firm’s seal.

In case of any problems, you must write to FCRA Dept at fcra-support@nic.in, explaining why you are not able to submit the details.

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Socio Research & Reform Foundation (NGO)
‎512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008

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

Dear Friends,

Prior permission letters specify number of and amount of each instalment to which Bank Managers decide to stick. Project holders seek funds based on action plan dictated by the seasons and community preparedness and convergence possibilities Bank’s insistence on instalments as defined in the prior permission letter.

What is the NGO supposed to do!

Udayashankar

MHA has now brought separate Forms FC6 for different aspects. These are FC-6A (Change of Name & Address), FC-6C (Changes in Designated bank account), FC-6D (Addition / Changes in Utilisation bank account) & FC-6E (Changes in Trustees / key functionaries). No Form has come out for changes in Objects of Trust. Earlier there used to be a consolidated Form FC-6, which one had to use for all these functions however now separate forms have been given for each of the functions. One practical advantage of this is that earlier, if one filled up one aspect of the form then one could not update any further change till the same was updated on the FCRA portal. Sometime this non-accessibility of the Form extended to months. However with separate form for each function, it will ease things a bit.

However problem in the updation still continues.  As the Form FC6E, which is meant for changes in Trustees still does not allow changes of less than 50%, thus defeating the purpose of the Notification that the FCRA Dept has come up with.

So the wait continues for most organisations to update the changes in the Trustees to comply with FCRA Dept’s own Notice, hopefully it would not be too long.

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Socio Research & Reform Foundation (NGO)
‎512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008

Home Ministry has now come with a notice requiring all registered NGOs to update all changes in office bearers. Till now Rule 17A required that any change shall be intimated electronically online, within fifteen days, The Rule covered several aspects of information about the NGO registered or having prior permission including changes in key members of the association if at any point of time such change causes replacement of fifty percent or more of the original key members as reported in the application for grant of registration/ prior permission/ renewal of registration under the Act [in Form FC-6E].

However now the Home Ministry’s new Notice states that all changes must be updated ‘online’ in real time. That means one needs to update all changes as and when the change occurs. It may be noted that earlier it was required only when more than 50% change happens from the date of position as included in the application submitted for registration / prior permission. In fact, earlier online Form did not have option to make this change if changes were less than 50%. Earlier the Rule 17A was for intimation, but now the Notice states that it has to be ‘approved’. This makes a marked change.

Notice requires the NGOs to submit applications for addition/ deletion/change of details about office bearers/ key functionaries by 7^th July 2019, failing which penal action will be initiated against them. Although presently the Form is not updated for individual changes, we hope it will be soon amended to allow the NGOs to update necessary changes.

One clarification, which was not their earlier has also come that in case Chief Functionary is not a Trustee / member, still his/her details should be intimated, since the applications are required to be signed by Chief Functionary only.

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Socio Research & Reform Foundation (NGO)
‎512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008

I had attended one workshop on NGO conducted by your organisation.

I have a Charitable trust registered under Bombay Public Trust Act. It is from Pune. We are 3 trustees all Hindu.

Kindly let me know how I can convert my trust into minority trust? 

Thanks in advance.

Kind regards,

Adv Nandini Shahasane