AMENDMENTS INTRODUCED BY THE (INDIAN) MINISTRY OF COMMERCE AND INDUSTRY
The Department of Commerce, Ministry of Commerce and Industry, Government of India vide notification dated July 14, 2022 has introduced amendments to Special Economic Zones Rules, 2006. The amendments have been introduced to existing Rule 43. A new Rule 43 A- Work From Home has also been introduced. A brief comparison of the changes and new addition is as under:
a. Rule 43 Clause (d) (i)
Prior to Amendment: The earlier Rule provided that employees of Information Technology (“IT)” and IT enabled Services (ITES) Special Economic Zone (“SEZ”) units and IT and IT enabled services units registered as Other Service Provider with Department of Telecom (DoT), employees temporarily in-capacitated, employees travelling and offsite employees of SEZ may be permitted to work from home or from a place outside the SEZ subject to the conditions as prescribed.
Post Amendment: As per the recent amendment, the above clause is deleted.
b. Rule 43 Clause (d)(ii)
Prior to Amendment: The earlier Rule provided that IT and IT enabled Services units in domestic tariff area (“DTA”) shall carry out their job-work in a SEZ unit by following the procedure prescribed under the said Rules.
Post Amendment: IT and IT enabled Services units in DTA shall carry out their job-work in a SEZ unit subject to the condition that such a SEZ unit shall ensure that the export revenue of the resultant products or services shall be accounted for by such SEZ unit.
c. Introduction of Rule 43 A:
As per the recent amendment, Rule 43 has been introduced which provides for “Work from Home”.
The new Rule provides that:
1. A Unit may permit its employees, including contractual employees to work from home or from any place outside a SEZ.
2. The employees of a Unit for the said purpose include the following,-
- employees of the IT and IT enabled services SEZ units;
- employees, who are temporarily incapacitated;
- employees, who are travelling; and
- employees, who are working offsite.
3. The Unit is required to submit its proposal for work from home to the Development Commissioner (“DC”) through email or physical application along with the terms and conditions of work from home, including the date from which the permission for work from home shall be utilised and the details of the employees to be covered by such permission for work from home.
4. A DC, on receipt of a proposal may grant permission to a Unit and the same shall be valid for a period of one year from the date of such permission and thereafter, may be extended for a period not exceeding one year at a time.
5. Every proposal or extension application as stated above shall be submitted, at least fifteen (15) days in advance, to the DC, except in case of the employees who are temporarily incapacitated or travelling.
6. A proposal for work from home shall cover a maximum fifty per cent (50%) of the total employees, including contractual employees, of the Unit and the attendance record maintained by the Unit shall be required to be submitted to the DC, from time to time.
7. DC may approve a higher number of employees to work from home for any bona-fide reason to be recorded in writing.
8. A Unit, where, its employees are working from home or from any place outside a SEZ on the date of commencement of amended Rules, shall submit its proposal for permission to the DC within ninety (90) days from the date of such commencement.
9. Where an employee ceases to be part of the project of a Unit, the employee shall be un-tagged from the Unit and the Unit shall surrender such an employee’s identity card.
10. A Unit may provide to an employee such goods, including laptop, computer, video projection system, other electronic equipment and secured connectivity (for virtual private network, virtual desktop infrastructure) to establish a connection between the employee and work related to the project of the unit with the prior permission of the Specified Officer to temporarily remove such goods to the DTA without payment of duty or integrated goods and services tax, subject to certain conditions as prescribed. The new Rule has also laid down certain procedural compliance in this regard.
Anhad Law’s Perspective
Post COVID-19, Units in SEZs had been permitted to allow their work force to operate from home. However, in the recent past such permissions were in the process of being withdrawn in a structured fashion asking Unit owners to bring back their workforce within the designated SEZs. Several Unit owners had asked for revision to the earlier Rules and allow their employees to work from home given the change in expectation and /or reluctance of certain employees to return to work area within a designated SEZ.
The amendments introduced now will provide a structured way of operations, albeit on an year to year basis initially until operations could be allowed on a long term or permanent basis.
–Manishi Pathak, Founding Partner & Anshul Chhabra, Sr. Associate
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