Registration for Accepting Foreign Contribution (FCRA)

Table of Contents

1. Registration for accepting foreign contribution
2. Application for registration or prior permission
3. Conditions for granting registration or permission
4. Suspension or cancellation of registration
5. Cancellation of registration
6. Surrender of Certificate of Registration under FCRA
7. Management of foreign contribution of person whose certificate has been cancelled or surrendered
8. Disposal of assets created out of foreign contribution if person ceases to exist or becomes defunct

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1. Registration for accepting foreign contribution

Any association having a definite cultural, economic, educational, religious or social programme can accept foreign contribution. Such association should not be of a political nature. The association should be registered with Central Government under section 12(1) of FCRA, 2010 [section 11(1) of FCRA, 2010].

Alternatively, it can accept foreign contribution with prior permission of Central Government, even if not registered [section 11(2) of FCRA, 2010] Prior permission is for specific donor and specific project.

Thus, registration is required if the foreign contribution is or will be obtained on regular basis, while prior permission (without registration) will be obtained when such foreign contribution is one time and not on a regular basis.

Registration obtained under FCRA 1976 valid for five years – Registration obtained under FCRA 1976 will be valid for five years and it will have to be renewed [proviso to section 11(1) of FCRA, 2010].

Overriding powers of Central Government – Central Government has overriding powers to insist on prior permission before obtaining foreign contribution, area and purpose for which it should be used, sources of such foreign contribution etc. Such order shall be by issuing notification in Official Gazette [section 11(3) of FCRA, 2010].

2. Application for registration or prior permission

Application for registration shall be made in prescribed form and manner with prescribed fees [section 12(1) of FCRA, 2010].

Every person who makes an application under section 12(1) shall be required to open “FCRA Account” in the manner specified in section 17 and mention details of such account in his application – section 12(1A) of FCRA, 2010 substituted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020.

This amendment has been held valid in Noel Harper v. UOI (2022) 137 taxmann.com 130 (SC).

Procedure for submitting application for registration – An application for certificate of registration by a person under section 11(1) of FEMA, for acceptance of foreign contribution shall be made in electronic form in Form FC-3A with an affidavit executed by each office bearer and key functionary and member in Proforma ‘AA’ and an application for obtaining prior permission by a person under section 11(2) of FEMA, for acceptance of foreign contribution, shall be made in electronic form in Form FC-3B  with an affidavit executed by each office bearer and key functionary and member in Proforma ‘AA’ – Rule 9(1)(a) of FC(R) (Regulation) Rules, 2011 as amended on 10-11-2020.

‘Electronic form’ shall have the same meaning assigned to it in section 2(1)(r) of the Information Technology Act, 2000 – rule 2(ba) of FC(R) Rules.

Any person making an application for registration under rule 9(1)(a) shall have an FCRA Account – Rule 9(1)(d) of FC(R) Rules inserted on 10-11-2020.

Every application seeking registration under rule 9(1)(a), made before 10-11-2020 but not disposed of, shall be considered after furnishing the details of FCRA Account – Rule 9(1A) of FC(R) Rules inserted on 10-11-2020.

“FCRA Account” means the FCRA Account referred to in section 17 of FCRA – rule 2(f) of FC(R) Rules.

Uploading of application – The applicant shall upload the signed or digitally signed application along with scanned documents as specified by the Central Government from time to time – Rule 9(1)(b) of FERA (Regulation) Rules, 2011 as amended on 14-12-2015.

Application for obtaining prior permission – Any person making an application for obtaining prior permission under -rule 9(1(a) shall have an FCRA Account – Rule 9(2)(d) of FC(R) Rules as amended on 10-11-2020.

A person seeking prior permission under rule 9(2) may open one or more accounts in one or more banks for the purpose of utilising the foreign contribution after it has been received and in all such cases intimation in electronic form in Form FC-6D shall be furnished to the Secretary, Ministry of Home Affairs, New Delhi within forty five days of the opening of any account. – Rule 9(2)(e) of FC (R) Rules as amended on 1-7-2022 [earlier, the time limit was 15 days].

A person seeking prior permission for receipt of specific amount from a specific donor for carrying out specific activities or projects mentioned in section 12(4)(c) of FCRA shall meet the following criteria, namely:—

(i) submit a specific commitment letter from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given;

(ii) for the Indian recipient persons and foreign donor organisations having common members, prior permission shall be granted to the person subject to it satisfying the following conditions, namely:—

(A) the chief functionary of the recipient person shall not be a part of the donor organisation;

(B) seventy-five per cent of the office-bearers or members of the governing body of the person shall not be members or employees of the foreign donor organisation;

(C) in case of foreign donor organisation being a single individual that individual shall not be the chief functionary or office bearer of the recipient person; and

(D) in case of a single foreign donor, 75% of the office bearers or members of the governing body of the recipient person shall not be the family members or close relatives of the donor – Rule 9(2)(f) of FC(R) Rules as amended on 10-11-2020.

Every application for obtaining prior permission under rule 9(1)(a) made before the commencement of these rules but not disposed of, shall be considered after furnishing the details of FCRA Account – Rule 9(2A) of FC(R) Rules as amended on 10-11-2020.

No application for prior permission for same project or registration – Further application cannot be made within six months after submitting application for prior permission for same project or for registration [Rule 9(3) of Foreign Contribution (Regulation) Rules, 2011].

Fees payable with application – An application made for the grant of prior permission shall be accompanied by a fee of rupees five thousand only, which shall be paid through the payment gateway specified by the Central Government – Rule 9(4)(a) FC(R) Rules as amended on 10-11-2020.

An application made for the grant of registration shall be accompanied by a fee of rupees ten thousand only, which shall be paid through the payment gateway specified by the Central Government – Rule 9(4)(b) of FC(R) Rules as amended on 10-11-2020.

Application electronically – All applications, intimations etc. under the Act have to be sent to Secretary, Ministry of Home Affairs, Government of India, FCRA Wing/Foreigners Division, Jaisalmer House, 26, Mansingh Road, New Delhi 110011. – – These have to be submitted electronically only.

Receipt of foreign contribution in instalments in application for obtaining prior permission, if amount exceeds Rs one crore – If the value of foreign contribution on the date of final disposal of an application for obtaining prior permission under rule 9(1)(a) is over rupees one crore, the Central Government may permit receipt of foreign contribution in such instalments, as it may deem fit. However, the second and subsequent instalment shall be released after submission of proof of utilisation of 75% of the foreign contribution received in the previous instalment and after field inquiry of the utilisation of foreign contribution – Rule 9A of FC(R) Rules inserted on 10-11-2020.

Registration or prior permission to be granted within 90 days – Registration or prior permission shall be normally granted within 90 days. If registration is not granted, reasons will be communicated within 90 days [section 12(3) of FCRA, 2010]

Such reasons need not be given for the same reasons for which any information or document is not required to be given under Right to Information Act, 2005 [section 12(5) of FCRA, 2010]

Aadhaar number, Passport or OCI card mandatory for prior permission or registration under FCRA – Notwithstanding anything contained in this Act, the Central Government may require that any person who seeks prior permission or prior approval under section 11, or makes an application for grant of certificate under section 12, or, as the case may be, for renewal of certificate under section 16, shall provide as identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries, by whatever name called, or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner – section 12A of FCRA inserted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020.

This amendment has been held valid in Noel Harper v. UOI (2022) 137 taxmann.com 130 (SC).

Application for revision to Central Government if adverse order passed – If an adverse order is passed by competent authority, application for revision can be made under section 32 of FCRA to Secretary, Ministry of Home Affairs, Government of India, New Delhi on a plain paper. Application shall be accompanied by a fee of rupees three thousand only, which shall be paid through the payment gateway specified by the Central Government [Rule 20 of Foreign Contribution (Regulation) Rules, 2011 amended on 10-11-2020].

Appeal before High Court – Appeal against the order of refusing registration or permission lies with High Court under section 31(2) of FCRA.

Validity of registration is for five years and its renewal – Registration is granted for a period of five years [section 12(6) of FCRA, 2010 and rule 12 of Foreign Contribution (Regulation) Rules, 2011]. It can be renewed by making application under section 16 of FCRA by applying six months before expiry of registration.

Extension of FCRA Registration Certificates expiring during 29-9-2020 to 30-9-2022 – Central Government has decided to extend the validity of FCRA registration certificates of the following categories of FCRA registered entities –

(i) The validity of registration certificates of such entities whose validity was extended till 30-09-2023 in terms of the Public Notice dated 24.03.2023 and whose renewal application is pending, will stand extended till 31-03-2024 or till the date of disposal of renewal application, whichever is earlier.

(ii) The validity of those FCRA entities whose 5 years validity period is expiring during 1.10.2023 to 31.03.2024 and who have applied/will apply for renewal before expiry of 5 years validity period, will stand extended upto 31-03-2024 or till the date of disposal of renewal application, whichever is earlier.

– – In case of refusal of the application for renewal of certificate of registration, the validity of the certificate shall be deemed to have expired on the date of refusal of the application of renewal and the association shall not be eligible either to receive the foreign contribution or utilise the foreign contribution received – Public notice No. II/21022/23(22)/2020-FCRA-III, dated 25-9-2023 issued by Ministry of Home Affairs (Foreigners Division-FCRA). [Earlier No. II/21022/23(22)/2020-FCRA-III, dated 24-3-2023 – still earlier Public notice No. II/21022/23(22)/2020-FCRA-III, dated 23-9-2022 and II/21022/23(22)/2020-FCRA-III, dated 22-6-2022].

Application for renewal – The Central Government may, before renewing the certificate, make such inquiry, as it deems fit, to satisfy itself that such person has fulfilled all conditions specified in section 12(4) of FCRA – proviso to section 16(1) inserted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020.

Every certificate of registration granted to a person under FCRA shall be valid for a period of five years from the date of its issue. The validity of certificate surrendered under section 14A of the Act shall be deemed to have expired on the date of acceptance of the request by the Central Government – Rule 10 of FC(R) Rules as amended on 10-11-2020.

An application for renewal of the certificate of registration shall be made to the Central Government in electronic form in Form FC-3C accompanied with an affidavit executed by each office bearer, key functionary and member in Proforma ‘AA’ appended to these rules within six months before the date of expiry of the certificate of registration [rule 12(2) of Foreign Contribution (Regulation) Rules, 2011 as amended w.e.f. 10-11-2020 and corrected vide corrigendum No. GSR 17(E) dated 11-1-2021]

An application made for renewal of the certificate of registration shall be accompanied by a fee of rupees five thousand only, which shall be paid through payment gateway specified by the Central Government – Rule 12(4) of FC(R) Rules as amended on 10-11-2020.

Every person seeking renewal of the certificate of registration under section 16 of the Act shall open an FCRA Account and mention details of the account in his application for renewal of registration – Rule 12(2A) of FC(R) Rules as amended on 10-11-2020.

Every application for renewal of the certificate of registration made under rule 12(2) before commencement of these rules, but not disposed of, shall be considered after furnishing the details of FCRA Account – Rule 12(2B) of FC(R) Rules as amended on 10-11-2020.

No receipt of foreign exchange till registration renewed – No person whose certificate of registration has ceased to exist shall either receive or utilise the foreign contribution until the certificate is renewed – Rule 12(5) of FC(R) Rules as amended on 10-11-2020.

Deemed cancellation of registration if not renewed – If no application for renewal of registration is received or the application is not accompanied by requisite fee before the expiry of the validity of the certificate of registration, the validity of the certificate of registration shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of certificate of registration – Rule 12(6) of FC(R) Rules as amended on 10-11-2020.

Note 1: A certificate of registration granted on the 1st January, 2012 shall be valid till the 31st December, 2016 and a request for renewal of certificate of registration shall be submitted in electronic form accompanied by requisite fee after the 30th June, 2016 and within the 31st December, 2016.

Note 2: If no application is received or is not accompanied by renewal fee, the validity of the certificate of registration issued on the 1st January, 2012 shall be deemed to have ceased after the 31st December, 2016 and the applicant shall neither receive nor utilise the foreign contribution until the certificate of registration is renewed.

In such case, fresh application for registration will have to be made.

Amount lying unutilised if registration ceases vests with Government – The amount of foreign contribution lying unutilised in the FCRA Account and utilisation account of a person whose certificate of registration is deemed to have ceased under rule 12(6) and assets, if any, created out of the foreign contribution, shall vest with the prescribed authority under FCRA until the certificate is renewed or fresh registration is granted by the Central Government – Rule 12(6A) of FC(R) Rules inserted on 10-11-2020.

If the validity of the certificate of registration of a person has ceased in accordance with the provisions of these rules, a fresh request for the grant of a certificate of registration may be made by the person to the Central Government as per the provisions of rule 9 – Rule 12(7) of FC(R) Rules.

Renewal of registration if application filed late – In case a person provides sufficient grounds, in writing, explaining the reasons for not submitting the certificate of registration for renewal within the stipulated time, his application may be accepted for consideration along with the requisite fee and with late fee of Rs. 5,000 (Five Thousand rupees only), but not later than one year after the expiry of the original certificate of registration – Rule 12(8) of FC(R) Rules.

Policy for granting permission or registration – Organisation should be in existence for three years. It should have spent at least ` 6 lakhs over its activities excluding administrative expenditure.

Extension upto 31-3-2023 of FCRA Registration Certificates expiring during 29-9-2020 to 31-3-2023 – The FCRA registration certificates which are expiring during the period between 29-9-2020 to 30-9-2022 and which await renewal shall remain valid upto 31-3-2023. The registration certificates which are expiring during 1-10-2022 to 31-3-2023 and who have applied/apply for renewal before expiry of 5 years stands extended upto 31-3-2023. Public Notice No.  II/21022/23(22)/2020-FCRA-III, dated 23-9-2022 (earlier No. II/21022/23(22)/2020-FCRA-III, dated 22-6-2022) issued by Ministry of Home Affairs (Foreigners Division-FCRA).

3. Conditions for granting registration or permission

Conditions for granting registration or prior permission are specified in section 12(4) of FCRA.

A person seeking registration under section 12(4)(b) of FCRA shall meet the following conditions, namely:-

(i) it shall be in existence for three years and have spent a minimum amount of rupees fifteen lakh on its core activities for the benefit of society during the last three financial years, provided that the Central Government, in exceptional cases or in cases where a person is controlled by the Central Government or a State Government may waive the conditions.

(ii) if the person wants inclusion of its existing capital investment in assets like land, building, other permanent structures, vehicles, equipment in the computation of its spending during last three years, then the chief functionary shall give an undertaking that the assets shall be vested henceforth with the person till the validity of the certificate and they shall be utilised only for the activities covered under the Act and the rules made thereunder and shall not be diverted for any other purpose till the validity of its certificate of registration remains valid – Rule 9(1)(f) of FC(R) Rules inserted w.e.f. 10-11-2020.

4. Suspension or cancellation of registration

Central Government can cancel the registration suspend a registration upto 180 days or such further period, not exceeding one hundred and eighty days, as may be specified by order in writing [section 13(1) of FCRA, 2010] [The words in italics inserted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020].

During this period, foreign contribution cannot be accepted and utilised or can be accepted and utilised only as per terms and conditions specified by Central Government [section 13(2) of FCRA, 2010].

The conditions are specified in rule 14 of FC(R) Rules.

Obviously, reasons should be given and principles of natural justice has to be followed. Such action cannot be arbitrary.

Custody of foreign contribution in respect of a person whose certificate has been cancelled. – If the certificate of registration of a person who has opened an FCRA Account under section 17 is cancelled, the amount of foreign contribution lying unutilised in that Account shall vest with the prescribed authority under the Act – Rule 15 of FC(R) Rules as amended on 10-11-2020.

Application for revision to Central Government if adverse order passed – If an adverse order is passed by competent authority, application for revision can be made under section 32 of FCRA to Secretary, Ministry of Home Affairs, Government of India, New Delhi on a plain paper. Application shall be accompanied by a fee of rupees three thousand only, which shall be paid through the payment gateway specified by the Central Government [Rule 20 of Foreign Contribution (Regulation) Rules, 2011 amended on 10-11-2020].

No appeal is provided against the order of suspension, but obviously writ petition can be filed.

5. Cancellation of registration

Registration can be cancelled by Central Government after making enquiry and after giving opportunity of hearing [section 14(2) of FCRA, 2010].

Such cancellation can be for reasons specified in section 14(1) of FCRA.

Application for revision to Central Government if adverse order passed – If an adverse order is passed by competent authority, application for revision can be made under section 32 of FCRA to Secretary, Ministry of Home Affairs, Government of India, New Delhi on a plain paper. Application shall be accompanied by a fee of rupees three thousand only, which shall be paid through the payment gateway specified by the Central Government [Rule 20 of Foreign Contribution (Regulation) Rules, 2011 amended on 10-11-2020].

Appeal against order of cancellation – Appeal against the order of cancellation lies with High Court under section 31(2) of FCRA.

6. Surrender of Certificate of Registration under FCRA

On a request being made in this behalf, the Central Government may permit any person to surrender the certificate granted under this Act, if, after making such inquiry as it deems fit, it is satisfied that such person has not contravened any of the provisions of this Act, and the management of foreign contribution and asset, if any, created out of such contribution has been vested in the authority as provided in section 15(1) of FCRA – section 14A of FCRA inserted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020.

The validity of certificate surrendered under section 14A of the Act shall be deemed to have expired on the date of acceptance of the request by the Central Government – Rule 10(2) of FC(R) Rules as amended on 10-11-2020.

Every person who has been granted certificate of registration under section 12 of the Act may make an application in electronic form in Form FC-7 for surrender of the certificate of registration in terms of section 14A of the Act – Rule 15A of FC(R) Rules as amended on
10-11-2020.

7. Management of foreign contribution of person whose certificate has been cancelled or surrendered

The foreign contribution and assets created out of the foreign contribution in the custody of every person whose certificate has been cancelled under section 14 or surrendered under section 14A shall vest in such authority as may be prescribed [section 15(1) of FCRA, 2010]. [words in italics inserted vide Foreign Contribution (Regulation) Amendment Act, 2020 w.e.f. 29-9-2020].

The Authority shall manage the activities as per directions of Central Government. The assets will be returned to the person if subsequently registration is restored.

Once the registration is cancelled or surrendered, the unutilised amount shall vest with bank concerned, till Central Government issues further directions [Rule 15 of Foreign Contribution (Regulation) Rules, 2011 as amended w.e.f. 12-4-2012].

Additional Chief Secretary or Principal Secretary (Home) of concerned State Government or Union Territory where assets of person whose registration has been cancelled or surrendered are physically located, is appointed as competent authority for purposes of section 15 of SCRA Act – Notification No. 5650(E) dated 5-11-2018.

8. Disposal of assets created out of foreign contribution if person ceases to exist or becomes defunct

Where any person who was permitted to accept foreign contribution under this Act, ceases to exist or has become defunct, all the assets of such person shall be disposed of in accordance with the provisions contained in any law for the time being in force under which the person was registered or incorporated.

In the absence of any such law, the Central Government may, having regard to the nature of assets created out of foreign contribution received under this Act, by notification, specify that all such assets shall be disposed of by such authority, as it may specify, in such manner and procedure as may be prescribed [section 22 of FCRA, 2010].