Advocacy & Government: The lack of an FCRA licence is impacting whether charitable organisations (including hospitals) can receive COVID-19 related relief material from overseas.
In addition to aid from various governments across the world, support has been pouring in from individual donors and global foundations as well. However, these donations—whether in-kind or cash—can only be received by those organisations that are registered with the Ministry of Home Affairs under the Foreign Contribution Regulation Act (FCRA).
On May 3rd 2021, the central government allowed the import of relief material from overseas to be exempt from GST. However, no such exemption has been granted from the FCRA law.
The law has some of the most stringent clauses, and the fear of violating it is impacting the plans of large donors to buy equipment like oxygen plants and concentrators for Indian hospitals, smaller charities, and organisations working in rural areas.
According to a report in The Hindu, foreign donors are keen to donate an oxygen production plant to a large hospital, where nearly two dozen patients had died after oxygen supplies were not replenished in a timely manner. However, the lack of an FCRA licence by the hospital is proving to be an obstacle.
Given that FCRA approvals take time, experts have said the government needs to urgently grant an exemption for all such donations.
“The FCRA law does not provide any blanket exemption for imports exempted by the central government, so no such exemption is available for importers of such COVID aid. It is advisable that the Centre issues a clarification exempting the receiver/importer from complying with the FCRA provisions for approval and other compliances,” said Suresh Surana, founder of tax consulting firm RSM India.
As per the FCRA law, a donation, delivery or transfer of any article, currency or foreign security, by any person who has received it from any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution, Mr Surana pointed out.
Read this explainer on the amendments made to Foreign Contribution Regulation Act (FCRA), 2010 and their implications.
