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The Union government on Monday said that contribution by a foreign company cannot be treated as “foreign source” if it fulfils certain conditions. “Provided that where the nominal value of share capital is within the limits specified for foreign investment under the Foreign Exchange Management Act, 1999 then notwithstanding the nominal value of share capital of a company being more than one-half of such value at the time of making the contribution, such company shall not be a foreign source,” stated the order issued by the union home ministry.

The revised guidelines issued on Monday relate to laws that need to be adhered while accepting the foreign hospitality or contribution. Under the powers to the central government, it may further prohibit “any person or organization other than government officials from accepting any foreign hospitality.”

If the government is satisfied that the acceptance of foreign contribution is not likely to affect prejudicially-“the sovereignty and integrity of India, public interest, freedom or fairness of election to any legislature, friendly relations with any foreign State, harmony between religious, racial, social, linguistic or regional groups, castes,” it stated.

While reiterating the earlier guidelines, the order stated that “no member of a legislature or office-bearer of a political party, judge, government servant or employee of any corporation while visiting any country accepts any foreign hospitality without the prior permission of the government. In case of any medical emergency while on foreign visit, the central government will have to be informed within one month from the date of receipt of such hospitality.”
The revised guidelines further incorporate changes made after the amendments into the FCRA Act in 2020 and online process started in 2015. For government officials or departments, they will be required to apply to the central government in electronic form for prior permission to accept foreign hospitality. “Every application for acceptance of foreign hospitality shall be accompanied by an invitation letter from the host or the host country, as the case may be, and administrative clearance of the ministry…” it noted.

Among the cases that will not require clearance from MHA includes-if the entire expenditure on the proposed foreign visit is being met by the central or state government, being undertaken by a person in his/her personal capacity and the entire expenditure is being met by the person concerned and if the foreign hospitality is being provided by an Indian national living in a foreign country, the order said.



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