MHA Extends Validity of FCRA Registration to 31st March, 2024

In the non-governmental sector, regulatory updates can often carry critical implications for various organizations’ functioning. One such directive has been recently released by the Ministry of Home Affairs (MHA), extending the validity of the FCRA Registration till March 31, 2024, under certain conditions. For the uninitiated, FCRA registration is a mandatory compliance measure that comes under the jurisdiction of the Foreign Contribution Regulation Act (FCRA) 2010.

Navigating the complexities of FCRA registration can often require professional NGO services. This article aims to provide a comprehensive explanation of the recent public notice by MHA.

Background – Understanding FCRA Registration

Introduced under an Amendment to the Foreign Contributions Regulation Rules 2011, in the year 2015, the requirement to renew registration certificates mandated under the Foreign Contribution Regulation Act (FCRA) has been a significant part of the NGO sector’s regulatory landscape.

Under this law, non-profit organizations in India that wish to accept foreign contribution must obtain a Certificate of Registration from the MHA. This certificate, valid for five years, is indicative of the NGO’s compliance with FCRA norms – unless suspended or cancelled earlier on account of any violation of the Act or the Rules.

This overview lays the foundation for understanding the FCRA registration and its significance. In subsequent parts, we will discuss the recent amendment in detail, the various categories it impacts, and the implications of the extended validity. It’s essential to keep up with these changes in regulations to maintain proper Books of Accounts as per Rule 17AA, Income Tax Act.

Overview of The Recent Public Notice

In continuation of the Ministry of Home Affairs’ public notice No-II/21022/23(22)/2020-FCRA-III, dated March 24, 2023, the Central Government has made an important decision regarding the validity of FCRA Registration certificates. This decision aims to provide relief to organizations by extending the validity of their FCRA Registration certificates if their renewal applications are under process.

The recent public notice by the MHA focuses on two categories of FCRA registered entities:

1. Entities with extended validity till September 30, 2023, and pending renewal applications: For organizations falling under this category, their FCRA Registration certificate’s validity will be further extended until March 31, 2024, or until the date of disposal of their renewal application, whichever is earlier.
2. Entities whose 5-year validity period is expiring between October 1, 2023, and March 31, 2024: Organizations falling under this category are eligible for an extension of their FCRA Registration certificate’s validity if they have applied for renewal before the expiry of the 5-year period. Their validity will be extended until March 31, 2024, or until the date of disposal of their renewal application, whichever is earlier.

These extensions aim to address the potential inconvenience faced by entities in the renewal process and provide them with more time to ensure continuity in receiving and utilizing foreign contributions.

The recent public notice further emphasizes that in cases where an organization’s renewal application is refused, the validity of the certificate shall be deemed expired on the date of refusal. It implies that the association will no longer be eligible to receive foreign contributions or utilize the foreign contribution received.

It is crucial for organizations falling under these categories to keep track of their renewal application status and take the necessary steps to ensure compliance.

Implications

The recent public notice by the Ministry of Home Affairs has several implications for FCRA registered entities. Let’s explore a few key points:

1. Refusal of Renewal Applications: In cases where an organization’s renewal application is refused, the validity of the FCRA Registration certificate shall be deemed expired on the date of refusal. This implies that the association will no longer be eligible to receive foreign contributions or utilize the foreign contribution received.
2. Pending Renewal Applications: For organizations with pending renewal applications, the recent notice provides an extension of the FCRA Registration certificate’s validity until the date of disposal of the renewal application. This allows these entities to continue their operations and receive foreign contributions until a decision is made on their renewal.
3. Criteria for Renewal and Continued Validity: It is important to note that renewal applications must meet the criteria outlined by the MHA for the FCRA Registration certificate to be extended. Organizations should ensure that their submissions adhere to the required guidelines and provide all necessary supporting documentation. Failure to meet these criteria may result in the refusal of renewal.

Entities should closely monitor the progress of their renewal applications and take appropriate actions to comply with the regulations and criteria set forth by the Ministry of Home Affairs.