The Center proposed amendments to the Foreign Tax Regulations Act or FCRA on Sunday through a bill it introduced in the Lok Sabha or lower house of Parliament.
According to the government, the proposed amendments “seek to simplify the provisions of the FCRA by strengthening the compliance mechanism, improving transparency and accountability in the receipt and use of foreign contributions worth billions of rupees each year.”
The proposed amendments seek to prevent public servants from receiving foreign funding.
The amendments seek to make Aadhar mandatory for all NGO position holders and other organizations seeking foreign contributions.
The bill also seeks to limit the use of foreign funds received under the FCRA for administrative purposes from the current limit of 50 percent to 20 percent.
“The annual inflow of foreign contribution has almost doubled between 2010 and 2019, but many recipients of foreign contribution have not used it for the purpose for which they were registered or were granted prior permission under said Law. Many of them also they were found to be deficient in ensuring compliance with basic laws, such as filing annual returns and maintaining adequate accounts, ”according to the proposed amendment.
“This has led to a situation where the central government had to cancel the registration certificates of more than 19,000 recipient organizations, including non-governmental organizations, during the period from 2011 to 2019,” it further says.
The bill, if passed, will empower the government to ask an offender not to use the funds by conducting a “summary investigation.”
Once the amendments are approved, no organization may transfer foreign contributions to any association / person under Section 7 of the FCRA.
“Any person who has been granted a certificate or prior permission for foreign financing will receive a foreign contribution only in an account designated as” FCRA Account “which must be opened at a branch of the State Bank of India in New Delhi, such as El The government can, by means of notice, specify and for other consequential matters related thereto, ”says the proposed amendment.
The FCRA was promulgated to regulate the acceptance and use of foreign contributions or foreign hospitality by certain individuals, associations or companies and to prohibit the acceptance and use of foreign contributions or foreign hospitality for any activity detrimental to the national interest and for related matters. with them or incidental. the same.
The law came into force on May 1, 2011 and has been amended twice since then. The first amendment was made by Section 236 of the Finance Act of 2016 and the second amendment was made by Section 220 of the Finance Act of 2018.
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