Thursday, July 16, 2015

Good news for Gujarat NGOs: Government issues GR waiving 2% administrative charge on foreign contributions

By Pankti Jog*
At a time when the Government of India is showing signs of uneasiness to foreign contributions (FCs) to non-government organizations (NGOs), in an interesting development, the Gujarat government has moved in just the opposite direction. 
The state government has come up with amended Bombay Public Trust Act rules, exempting NGOs and charitable trusts, receiving FCs, from paying two per cent levy on donations, or Rs 50,000 per year, whichever was higher.
The “good news” for registered trusts and societies in Gujarat has made NGOs, otherwise known to be pretty critical of government, quite happy. Gujarat is the only state till now, where donations to NGOs invited a two per cent levy for so-called administrative charges.
Albeit small, most of the NGOs were unable to reimburse the amount which the state government took away from the respective donor agencies. To those that worked with shoestring budget, it was really a serious issue.
Taking away Rs 50,000 each year to be paid for running the administration of the charity commissioner’s office each year would tell on their projects. Despite their unwillingness, NGOs across the state have been paying the amount for years.
As per a right to information (RTI) reply, over the last five years, the total amount collected thus by the state government came to Rs 58,54,96,323, averaging around Rs 9 crore per year. The RTI reply also revealed that the government had a surplus of Rs 123 crore in the year 2013-14 from the collection it has been making (see the table).
Several NGOs have for long been raising objections before state officials to the administrative charges from the FC grants it received for projects in Gujarat. They have, from time to time, posed three separate questions before the government.
The first question was about the quality of the services provided to the NGO sector as against the charges that were levied on them. In several cases, the registration of change of trustees, or change in the property holding, has been pending for about a decade years.
Second one was, if the government could regulate companies through the Registrar of Companies and other bodies like the labour commissioner’s office, the pollution control board, and so on, without charging any amount as administrative expense, what was the rationale behind charging NGOs towards their regulation cost?
And finally, NGOs play a “key role” in the development of communities, which is actually the primary responsibility of the government. Instead of recognizing this role, the NGOs in Gujarat were being penalized.
Recently, a public interest litigation (PIL) was filed in the Gujarat High Court seeking a stay on the administrative charges, as enough surplus amount had already been collected by the government, so much so that the charity commissioner’s office could be run from the interest of the fixed deposit of the entire amount.
As the PIL was still under hearing stage, the Gujarat government issued the notification giving exemption from administrative charges on grants and donations under FCRA, giving relief to over 1,500 NGOs of Gujarat.
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*Mahiti Adhikar Gujarat Pahel, Gujarat. Click HERE to download new rules

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