Foreign Contribution (Regulation) Act, 1976 was enacted in order to regulate the acceptance and regulation of foreign contribution or foreign hospitality. However the 1976 Act stood repealed by Foreign Contribution (Regulation) Act, 2010, which came into effect from May 1st, 2011 along with Foreign Contribution (Regulation) Rules, 2011.
The FCRA, 2010 provides the provision of obtaining prior permission of Central Government to receive fund under Foreign Contribution Regulation Act, 2010. FCRA, 1976 also provided the option of obtaining prior permission to receive fund under the Act, however, the 1976 Act also provided the option of obtaining deemed prior permission from Central Government to receive funds.
Is the deemed prior permission granted under FCRA, 1976 valid after coming in force of the new Act. Read further to know more about prior permission, deemed prior permission and validity of deemed prior permission after coming in force of Foreign Contribution Regulation Act, 2010

Prior Permission under the Foreign Contribution (Regulation) Act, 2010

To obtain fund under FCRA, 2010 an organization needs to get a certificate of registration from Central Government. However, an organization which has a definite cultural,economic, educational, religious or social programme but has not obtained the certificate of registration needs to get prior permission of Central Government before accepting foreign contribution as discussed here.

Deemed Permission under the Foreign Contribution (Regulation) Act, 1976

The concept of ‘prior permission’ under the FCRA, 1976 was same as that of the 2010 FCRA Act, however in the Foreign Contribution Regulation Act, 1976 there was a provision of deemed ‘prior permission’. Section 11(2) of the 1976 provided that if an application of ‘prior permission’ is not disposed of within 90 days from the date receipt of such application, then the permission prayed in that application would be deemed to be granted.

Is the deemed prior permission granted under FCRA, 1976 valid under FCRA, 2010?

Section 11 of the Foreign Contribution Regulation Act 2010 clearly states that prior permission granted under the FCRA, 1976 will remain valid even after enforcement of Foreign Contribution Regulation Act, 2010.
Hence, an organization that had been granted deemed prior permission under FCRA, 1976 need not take a new prior permission under Foreign Contribution Regulation Act, 2010.
The deemed prior permission granted under FCRA, 1978 will remain valid for a period of 5 years from the date of commencement of the Foreign Contribution Regulation Act, 2010 after which it will have to be renewed.

Another provision that can be said to be providing validity to the deemed prior permissions taken under the FCRA, 1976 is Section 54(2) of Foreign Contribution Regulation Act, 2010. Technically this section does not as provide for validity of prior permission as does section 11. Section 54 of FCRA, 2010 is a saving Section which provides that anything that has been done under the Foreign Contribution Regulation Act,1976 shall be valid under the Foreign Contribution Regulation Act, 2010 if it is not inconsistent with the Act.
Hope this post was useful for you. You can mail at srishti@ipleaders.in or info@ipleaders.in in case of any query or doubt.

*Research work and drafting done by Suyash Manjul, Vth Yr, Ram Manohar Lohiya National Law University

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1 COMMENT

  1. hi Srishti. I am researching into getting an FCRA certification for a Trust that is running a school and building an orphanage. The Trust was registered in October 2010. I understand that one has to wait for three years before applying for permanent certification (I also read that this is not specified in the law, but is a general directive). Is it also true that a Trust has to show a record of funds under Prior Permission before they can apply for permanent certification?

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