Centre permits 100% WFH for IT firms operating in SEZs

The Information Technology (IT) firms that are operating in Special Economic Zones (SEZs) got permission from the commerce department for 100 percent Work From Home (WFH) or any place outside such zones till December 31, 2023.

The employees of IT/ITeS companies, employees who are travelling as well as those who are working offsite will be allowed to work from home (WFH) or any place outside SEZs, as per the amended rule 43A under the SEZ law.

In July, the Centre allowed 50 percent of the employees in SEZs to work from home which includes contractual workers. Till now, WFH was permitted for a maximum period of one year in a SEZ unit. The flexibility was also granted to development commissioners of SEZs to approve a higher number of people to WFH.

However, during implementation of the rules, the industry had pointed out there were various challenges on interpretation as well as compliance related challenges.

The new rule says that a unit needs to maintain the lists of employees who are allowed to follow WFH or from any place outside SEZs. The list will have to be submitted to the development commissioner whenever required.

Besides, employees will have to be provided with duty-free goods, including laptop, desktop, and other electronic equipment for WFH or any place outside the SEZ, without any payment of IGST or services tax on a temporary basis.

Ashish Aggarwal, VP and Head of Public Policy at NASSCOM, said this is a major step towards ease of doing business. “Given the industry feedback that the earlier notification issued in July 2022 was posing operational challenges, the government has now simplified the SEZ rules to allow IT BPM firms to implement a hybrid model based on their requirement. Now, till December 2023, only an email intimation without the need to submit a list of employees is needed,” he said.

“Industry is today at 85-88 per cent remote working. The one-year relaxation is expected to allow the industry to gradually reach a stable level of hybrid working with a more even split in work being done from offices and remotely,” he said.