The Ministry of Industry and Commerce has amended the Special Economic Zones Rules, 2006 (“Rules”) vide the Special Economic Zones (Third Amendment) Rules, 2022 notified on July 14, 2022 (“2022 Amendment”).
The 2022 Amendment has introduced a new Rule 43A which enables units operating in SEZs to permit its contractual and full-time employees (i) in Information Technology and Information Technology enabled Services Special Economic Zone units, (ii) who are temporarily incapacitated, (iii) who are travelling, and (iv) who are working offsite, to work from home or any place outside the SEZ (“WFH”) subject to the following conditions:
(a) The unit shall apply to the Development Commissioner appointed under the Special Economic Zones Act, 2005 (“Commissioner”) either through email or physical application, stating the (i) terms of WFH, (ii) date of commencement of WFH, and (iii) details of the employees permitted to WFH;
(b) The permission for WFH may be granted for a period up to one year, and on application, extended by the Commissioner for not more than a year at a time;
(c) WFH will be allowed for up to 50% of the total number of employees of the unit, provided however, this limit may be increased by the Commissioner for bona-fide reasons;
(d) The SEZ unit shall maintain attendance records during the period of WFH and submit the same to the Commissioner, from time to time;
(e) A unit may seek permission from the ‘Specified Officer’ appointed pursuant to the Rules for removal of laptops, virtual private networks or desktops, and other electronic equipment from the SEZ for WFH without payment of any duty or IGST, provided:
(f) Export revenue from the work of the employees permitted for WFH shall be accounted for the unit to which the employee is tagged;
(g) The employees permitted for WFH shall perform the work related to the services approved to the SEZ unit and its projects; and
(h) The employee shall be untagged from the unit upon ceasing to be a part of the unit’s project, and the unit shall surrender their identity card in accordance with rule 70(2).
If an SEZ unit is providing WFH facilities to its employees on the date of the 2022 Amendment (i.e. July 14, 2022), such unit must submit a proposal specified in paragraph (a) above to the Commissioner within 90 days of the 2022 Amendment i.e. by October 12, 2022.
The earlier WFH conditions set out under rule 43 of the Rules have been revoked.
This update has been contributed by Armaan Patkar (Partner) and Rohan Aneja (Associate).
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