NGOs to Lose FCRA License over Conversions, Anti-Development Acts: MHA

What’s in today’s article?

• About Foreign Contribution Regulation Act
• Major Provisions Under the FCRA, 2010
• For What Purpose a Registered NGO can Receive Foreign Contributions?
• Who Cannot Receive Foreign Funding?
• Foreign Contribution Regulation Amendment Act, 2020
• News Summary

Why in the News?

• The Central Government announced that any NGO involved in anti-developmental activities and forced religious conversions will face cancellation of their registration under Foreign Contribution (Regulation) Act (FCRA), 2010.

About Foreign Contribution Regulation Act

• The FCRA was first enacted in 1976 in order to maintain strict control over voluntary organisations and political associations that received foreign fundings.
• In 2010, the Act was repealed and a new Act with strict provisions was enacted.
• Objective: To regulate foreign donations and ensure that such contributions do not adversely affect internal security of India.
• Nodal Ministry: Ministry of Home Affairs
• It is applicable to all associations, groups and NGOs which intend to receive foreign donations.

Major Provisions Under the FCRA, 2010

• It is mandatory for all such NGOs to register themselves under the FCRA.
• The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
• For such NGOs, filing of annual returns, on the lines of Income Tax, is compulsory.
• In 2015, the MHA notified new rules, which required NGOs to give an undertaking that the acceptance of foreign funds:
  • Does not affect the sovereignty and integrity of India
  • Does not impact the friendly relations with any foreign state
  • Does not disrupt communal harmony
• All such NGOs would have to operate accounts in either nationalised or private banks which have core banking facilities to allow security agencies access on a real time basis.

For What Purpose a Registered NGO can Receive Foreign Contributions?

• A registered NGO can receive foreign contributions for the following five purposes:
  • Social
  • Educational
  • Religious
  • Economic
  • Cultural

Who Cannot Receive Foreign Funding?

• Following individuals/organizations cannot receive foreign funding:
  • A candidate contesting elections
  • Media persons
  • Judges
  • Government employees
  • Political parties

Foreign Contribution Regulation Amendment Act, 2020

• The Amendment adds Public Servants to the list of people who cannot accept foreign contributions.
• It prohibits the transfer of foreign contribution to any other person.
  • The term ‘person’ under the Act includes an individual, an association, or a registered company.
• It makes it mandatory to provide Aadhar number for any person seeking prior permission, registration or renewal of registration.
• It provides that the government may conduct an inquiry before renewing the certificate.
• It adds a provision allowing the central government to permit a person to surrender their registration certificate.
• It makes it mandatory for all NGOs receiving foreign aid to open an account in State Bank of India’s New Delhi branch.

News Summary

• The Indian government announced that NGOs involved in anti-development activities, forced religious conversions, or actions affecting social or religious harmony may have their Foreign Contribution (Regulation) Act (FCRA) registration cancelled.
• The notice states that NGOs using foreign funds for personal gain, undesirable activities, or with links to terrorist or radical groups will also face cancellation.
• Additionally, NGOs not using foreign funds according to their stated objectives may lose their FCRA registration.

Q1. What is a Political Pressure Group?

Political pressure groups are organisations set up in order to influence government policy-making, legislation, and public opinion.

Q2. Are NGOs exempted from GST?

'Charitable Activities' A special exemption is provided in GST for NGOs registered under sec. 12AA. They need not pay any GST on 'charitable activities'. Similarly, they need not pay GST even if they charge fees for training or coaching in arts, culture or sports.

News: NGOs to lose FCRA licence over conversions, anti-development acts: MHA