OSPs and SEZs
Special Economic Zones (SEZs) are those pockets in a nation to which are applied different economic rules and regulations than in the other areas of the same nation. In India, the SEZ policy first came into existence on 1 April, 2000, with the aim of attracting foreign direct investment and promoting a conducive environment for Indian exports.
If you are an OSP operating from an SEZ, apart from all the regular paperwork and compliance, there are a few things you need to keep in mind. It is important to remember that while normal OSP regulations are applicable, there is a complication from the SEZ point of view as noticed in the 2016 amendment.
According to the General Conditions specified in the 2016 Amendment,
- the worker must be a regular employee of the SEZ unit
- should be authorized to perform the work pertaining to that unit
- the work undertaken by the employee during WFH should pertain to the services approved for an SEZ and is related to an SEZ project.
- when WFH is undertaken, infrastructure like laptop/desktop, secure connectivity with VPN, VDI etc. should be provided to establish a connection between the employee and the SEZ.
- Further, the export revenue of the ensuing products or services must be accounted for by the particular SEZ unit. The export of services from outside the SEZ unit is prohibited.
- Lastly, if the employee ceases to work with the SEZ unit, the employee shall be untagged and the I-card (form-K) must be surrendered to Specified Officer.
An additional condition also states that SEZ units registered as OSPs with DoT where employees are WFH, the SEZ units must strictly follow the OSP guidelines and its timely amendments issued by DoT.
There has been no new Annexure to the Amendments since the 2016 regulations. Therefore, OSPs must diligently follow the 2016 Amendments when their employees are working from home in the current scenario.
Since the Covid pandemic arrived in India, working from home has been allowed on a very relaxed basis by DoT. Under these terms, companies are allowed to enable remote work with their own private IPs and VPNs. The same terms substantially apply to OSPs operating from SEZs as well.
We are still awaiting an update from the government to learn if the relaxations will continue post 31 Dec 2020. If yes, then it is “New” business as usual. If the government refuses to extend the relaxations, then SEZs will have to go back to the earlier rules and relaxations.
Want to know more? Drop in an email at rupali@assertion.cloud. Sign up with us and stop worrying about OSP compliance completely.
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