A Special Economic Zone (SEZ) is an area in a country that is subject to different economic regulation than other region within the same country. They are mainly created in order to increase the employment, trade balance, foreign investments and effective management. The Ministry of Commerce and Industry on 14th July, 2022 has published the Special Economic Zones (Third Amendment) Rules, 2022 to further amend the Special Economic Zone Rules, 2006. Through this amendment a new rule 43A has been notified which deals with the provisions of work from home of employees of units of a SEZ. The key amendments are as follows:  



Rule 43A: Provision for work from home 


Grant of permission for work from home:

A unit may permit its employees, including contractual employees to work from home or from any place outside the Specific Economic Zone according to this rule. 

Definition of Employees:

The term ‘employees’ mentioned under sub-rule (1) includes: 

  1. Employees of the Information Technology and Information Technology enabled Services Special Economic Zones units; 
  2. Employees who are temporarily incapacitated; 
  3. Employees who are travelling;  
  4. Employees who are working offsite; 

 Terms and Conditions:

The unit shall submit its proposal for work from home to the Development Commissioner through email or physical application, which shall contain the terms and conditions of work from home, including the date from which the permission for work from home shall be utilized and the details of the employees to be covered by such permission from work from home.  

 Validity and Extension of the Permission:

The Development Commissioner, on receipt of the proposal complies with this rule, may grant the permission to the proposal of the Unit which shall be valid for a period of one year from the date of the permission.  

The Development Commissioner may, on receipt of an application for extension of the permissions, if he is satisfied with the proposal and that the unit and its employees haMaxve complied with this rule, extend the permission for such period, not exceeding one year at a time.  

Every proposal for permission of work from home or an application for extension of the permissions shall be submitted, at least fifteen days in advance, to the Development Commissioner, except in case of employees who are temporary incapacitated or travelling. 

 Maximum number of employees and maintenance of attendance record:

The proposal for work from home shall cover a maximum fifty per cent of the total employees, including contractual employees of the Unit and the Unit shall maintain accurate attendance record for the entire period of permission for work from home and shall submit to the Development Commissioner, from time to time.  

However, the Development Commissioner may approve a higher number of employees to work from home for any bona-fide reason. 

Submission of proposal for permission:

An Unit, where, its employees are working from home or from any other place outside the Special Economic Zone on the date of commencement of the Special Economic Zones (Third Amendment) Rules, 2022, shall submit its proposal for permission to the Development Commissioner within ninety days from the date of such commencement.  

Nature of the work:

The work to be performed by the employee permitted to work from home under this rule shall be as per the services approved for the Unit, and the work is related to a project of the Unit.  

 Ensuring Export Revenue:

The Unit shall ensure export revenue of the resultant products or services to be accounted for by the Unit to which the employee is tagged.  

Also, where an employee ceases to be part of the project of the Unit, the employee shall be un-tagged from the Unit and the Unit shall surrender the identity card as per sub-rule (2) of rule 70. Rule 70 of the Special Economic Zones Act, 2006 is regarding provision for issuance of Identity Cards.  

 Provision of temporary removal of goods from the zone :

The 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 Domestic Tariff Area without payment of duty or integrated goods and services tax, subject to following procedure, namely:-  

  1. The unit shall account for the goods removed temporarily; 
  2. The unit shall issue a certificate authorizing 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 and a copy of the certificate shall be endorsed to the Specified Officer and acknowledgement received by the Unit, and  
  3. The unit shall maintain a record of such certificate of authorization issued under clause (ii) for the temporary removal of equipment  

Notwithstanding anything in sub-rule (1) of rule 50, the specified officer may approve the removal of goods required by an employee permitted to work from home and shall be valid up to such period of permission from work from home under this rule is valid. 


Earlier, the units established in Special Economic Zones were granted certain incentives, including tax benefits for goods and services exported by them, but with stringent control and regulations in place. Recently, the insertion of Rule 43A in the Special Economic Zones Rules has provided the companies or industries flexibility to allow a maximum 50% of their employees to work from home and along with prior permission to temporarily remove goods such as laptops, computers, electronic equipment, etc., from the SEZ unit to a domestic tariff area without payment of duty.