Work-from-home for employees: Commerce ministry issues WFH guidelines for SEZ units

Units in a special economic zone that want to permit work-from-home for employees will have to formulate a scheme and take approval from development commissioners concerned, the commerce ministry said on Friday.

In July, the government allowed WFH for a maximum period of one year in a special economic zone (SEZ) unit. The facility can be extended to 50 per cent of total employees.

The guidelines issued by the ministry said the units will also have to submit an application to their development commissioners, notifying the adoption of the scheme, at leat 14 days in advance from the date of implementation of the scheme.

The Department of Commerce has notified new rule 43A for WFH in Special Economic Zones Rules, 2006.

These rules were issued on demand from the industry to make a provision for a countrywide uniform WFH policy across all SEZs.

The new rule provides WFH for a certain category of employees of a unit in SEZ.

These include employees of IT/ITeS SEZ units; employees who are temporarily incapacitated; employees who are travelling and who are working offsite.
"The units intending to or implementing WFH will formulate and adopt a WFH scheme," it said.

It added that the application for approval of the WFH scheme will be processed and approved within 15 days and if no communication is received by the unit within 15 days, the scheme will be deemed to have been approved.

The units will also have to ensure that the electronic assets removed are duly accounted for in appropriate records.

A unit can also submit a revised scheme any time.

Commenting on the move, Abhishek Jain, Partner Indirect Tax, KPMG in India, said the government has issued much awaited SOP (standard operating procedure) in relation to WFH provisions for SEZ units.

These guidelines will not only bring procedural clarity for businesses but also ensure that a uniform process is followed across SEZs in the country, helping businesses avoid the tedious talks of undertaking different processes for different SEZ jurisdictions, he said.

SEZs, which emerged as major export hubs in the country, started losing sheen after the imposition of minimum alternate tax and introduction of a sunset clause to end fiscal incentives.

These zones are treated as foreign entities in terms of provisions related to customs.

The commerce ministry is working to replace the existing SEZ law with new legislation to enable states to become partners in 'Development of Enterprise and Service Hubs'.