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The Department of Commerce notifies the Special Economic Zones (Third Amendment) Rules, 2022 for making a provision for ‘Work from Home’

The Department of Commerce notifies the Special Economic Zones (Third Amendment) Rules, 2022 for making a provision for ‘Work from Home’

The Department of Commerce, on 14th July 2022, notified the Special Economic Zones (Third Amendment) Rules, 2022 (“SEZ WFH Rules”), amending the Special Economic Zones Rules, 2006 (“SEZ Rules”) by inserting Rule 43A for “Work from Home”/“WFH” in Special Economic Zones (“SEZ”) with the intent to align the ‘Work from Home’ policies across all SEZs in India.

The insertion of Rule 43A formalises the procedure previously detailed in the instructions passed by the Ministry of Commerce and Industry temporarily allowing employees in SEZ Units to WFH.


SEZ WFH Rules apply to the following categories of employees (including contractual) that are working in a SEZ Unit;

  • Employees of the Information Technology and Information Technology enabled Services Special Economic Zone Units
  • Employees who are temporarily incapacitated
  • Employees who are traveling
  • Employees who are working offsite
Salient Features
  • Process: The SEZ WFH Rules require a Unit to submit a proposal for WFH to the Development Commissioner (“DC”) through email or physical application, which shall contain the terms and conditions of WFH, including the date from which the permission for WFH shall be utilised and the details of the employees to be covered by such permission. The application must be filed 15 days in advance, from the proposed starting date of WFH, to the DC. This provision will not apply to employees who are incapacitated and employees who are travelling.
  • Validity: The DC, subject to the WFH proposal being compliant with these Rules, may approve the WFH proposal for a period of 1 year starting from the date of permission and may grant an extension to the WFH proposal for a period not exceeding 1 year at a time. Under the SEZ WFH Rules, only 50% of employees, including contractual employees, can be given WFH. For this purpose, a Unit is required to maintain accurate attendance records for the entire period of permission which must be submitted to the DC from time to time.
  • Employees already engaged in WFH: Units where the employees are already working from home or from any place outside the SEZ, on the date of the commencement of the SEZ WFH Rules, shall submit their proposal for permission to allow WFH to the DC within 90 days of such commencement.
  • Work assigned to the employee: The SEZ WFH Rules require that the work to be performed by the employee permitted to WFH is as per the services approved for the Unit, and the work related to a project of the Unit. Additionally, Units shall ensure export revenue of the resultant products or services to be accounted for by the Unit to which the employee is tagged.
  • Removal of goods to Domestic Tariff Area (“DTA”): A DTA under the SEZ Act, 2005 means the whole of India (including the territorial waters and continental shelf) but does not include the areas of the SEZs. For the purposes of establishing a connection between the employee and work related to the project of the Unit, the Unit may inter alia provide to an employee goods, such as, laptop, computer, video projection system, other electronic equipment and secured connectivity. Such goods can be temporarily removed from the SEZ Unit to the Domestic Tariff Area (without payment of duty or integrated goods and services tax) only after obtaining prior permission from the Specified Officer, subject to the following procedure, namely:
    • The Unit shall account for the goods removed temporarily;
    • The Unit shall issue a certificate authorising the employee by name and giving the full specification, namely, serial number and model number and make of the equipment intended to be taken outside the processing area temporarily. A copy of the certificate shall be endorsed to the Specified Officer and acknowledgement received by the Unit; and
    • The Unit shall maintain a record of such certificate of authorisation issued for temporary removal of equipment.
  • Cessation of employment: Under the SEZ WFH Rules, once an employee ceases to be part of the project of the Unit, the employee will be untagged from the Unit and the Unit shall surrender the identity card.
Our Take:

Rule 43A has been inserted under the SEZ WFH Rules with the aim of aligning WFH policies across SEZ Units in India and enabling ease of doing business. Presently, the Government is also in the process of developing paperless norms in relation to SEZs and their customs requirements. These developments appear to be in the right direction since it enables corporates and entities that have Units in SEZs to foster flexibility and uncomplicated compliance.



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