1. GOVT AMENDS SEZ NORMS TO HELP COMPANIES OPT FOR FLEXIBLE WORK OPTIONS
The government has amended the Special Economic Zones (SEZ) Rules, 2006 to accommodate the work-from-home model of employment, a move expected to change the demand for leasing of space at information technology parks.
This proposal for working from home will cover a maximum of 50% of the total employees, including contractual employees, of the unit. The development commissioner may approve a higher number of employees to work from home for any bona fide reason to be recorded in writing.
INSERTION OF RULE 43A:
The insertion of Rule 43A in the SEZ Rules provides companies the flexibility to allow a maximum of 50% of their employees to work from home, 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 or integrated goods and services tax (IGST).
ELIGIBLE EMPLOYEES COVERED UNDER THIS NOTIFICATION:
Employees who are covered under this notification include employees of the IT and IT-enabled services SEZ units, employees that are temporarily incapacitated, employees who are traveling; and employees who are working offsite.
APPLICATION TO DEVELOPMENT COMMISSIONER:
- Existing units providing work from home:
The unit whose employees are working from home or from any place outside the SEZ on the date of commencement of the SEZ (third amendment) Rules, 2022, is expected to submit its proposal for permission within 90 days from the date of such commencement.
- Units intend to provide work from home:
The unit operating in the SEZ is expected to submit its proposal for work from home for its employees to the development commissioner through email or physical application. This application needs to contain the terms and conditions of working from home, including the date from which the permission for the same will be utilised and details of the employees to be covered by such permission.
The development commissioner, on receipt of such a proposal with compliance, can grant permission to the proposal of the unit, which will be valid for a period of one year from the date of the permission. The authority can grant an extension for this permission, not exceeding one year at a time.
The application for the extension needs to be submitted at least 15 days in advance to the development commissioner, except in the case of employees who are temporarily incapacitated or traveling.
2. PM NARENDRA MODI TO LAUNCH INDIA INTERNATIONAL BULLION EXCHANGE (IIBX) AT GIFT CITY ON 29TH JULY
IIBX is India’s first Internationl Bullion Exchange(IIBX) set up at the GIFT City, Gandhinagar. IIBX offers a diversified portfolio of products and technology services at a cost which is far more competitive than the Indian exchanges as well as other global exchanges in Hong Kong Singapore, Dubai, London and New York.
IIBX will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialisaton of gold in India, said a statement by the IFSC Authority.
Gold 1 kg 995 purity and gold 100 gm 999 purity with a T+0 settlement (100% upfront margin) are expected to trade at IIBX initially. All contracts are listed, traded & settled on IIBX are in US Dollars.
WHAT IS A BULLION?
Bullion refers to physical gold and silver of high purity that is often kept in the form of bars, ingots, or coins. Bullion can sometimes be considered legal tender and is often held as reserves by central banks or held by institutional investors.
GUIDELINES ISSUED FROM RBI:
In May this year, the Reserve Bank of India (RBI) came up with norms for facilitating physical import of gold through IIBX or similar authorised exchange by Qualified Jewellers in India.The guidelines were issued in order to enable resident Qualified Jewellers to import gold through IIBX or any other exchange approved by IFSCA and the Directorate General of Foreign Trade (DGFT).
WHO CAN TRADE ON THE IIBX?
Qualified jewellers will be permitted to import gold through the IIBX.
Apart from qualified jewellers, non-resident Indians and institutions will also be able to participate on the exchange after registering with the IFSCA. In the medium term, institutions such as Funds for Gold ETF are also expected to participate.
The IIBX will submit a report to IFSCA on a monthly basis providing details of transactions in bullion by qualified jewellers, including details of products traded, quantity, value, quantity of gold imported etc.
HOW MANY JEWELLERS HAVE SO FAR REGISTERED ON THE EXCHANGE?
Currently, there are 56 jewellers registered on the IIBX. This includes the likes of Malabar Gold Pvt Ltd, Titan Company Ltd, Bangalore Refinery Pvt Ltd, RBZ Jewellers Pvt Ltd, Zaveri and Company Pvt Ltd, Sanghi Jewellers Pvt Ltd, among others. Trial transactions towards imports are currently being undertaken at the IIBX.
3. DRAFT DEVELOPMENT OF ENTERPRISE AND SERVICE HUBS (DESH) BILL
The Centre plans to table the Development of Enterprise and Service Hubs (DESH) Bill in the monsoon session of the Parliament, which will overhaul the special economic zones (SEZ) legislation. Through this, the government is seeking to go beyond export-oriented manufacturing and focus on broad-based parameters such as boosting additional economic activity, generating employment, and integrating various industrial hubs.
The Bill is the outcome of proposals made by an expert committee headed by Bharat Forge Chairman Baba Kalyan.
The DESH Bill classifies two types of developmental hubs — Enterprise and services hubs. While the enterprise hubs will have land-based area requirements and be allowed for both manufacturing and services activities, services hubs will have built-up area requirements and be allowed for only services-related activities.
KEY FEATURES OF THE DESH BILL:
- The bill seeks to expand the ambit of the SEZs to make them WTO-compliant and perform roles that go beyond export-orientation.
- It aims to set up ‘development hubs’ for promoting economic activity, generating employment, integrating with global supply and value chains and maintaining manufacturing and export competitiveness, developing infrastructure facilities, promoting investments, including in research and development (R&D). Such hubs will also include existing SEZs.
- The proposed legislation, drafted by the commerce and industry ministry, also seeks to emphasise on promoting not only manufacturing but trading and services too.
- In SEZs, only specified services such as IT, ITeS are allowed. But now all services in alignment with GST laws will be allowed, which include liaison offices as well.
- It does not seek to make it mandatory for the SEZs to have positive net foreign exchange earnings. It seeks to focus on single-window clearances.
- According to the draft Bill, there will also not be any requirement to have specific demarcation for trading and warehousing activities.
- While there won’t be any direct tax benefits as was given to SEZs which ran into trouble with WTO norms, some indirect tax benefits would be there.
- They would be allowed to sell in the domestic market with duties to be paid only on imported raw materials and inputs instead of final products.
- DESH bill also provides for an online single-window portal for the grant of time-bound approvals for establishing and operating the hubs.
- These development hubs can be set up by the Centre or state, or jointly by them or by any manufacturer of goods and services.
- A key differentiator between new and the old law is that under DESH, hubs will allow units to make optimal use of their idle infrastructure by delivering services to customers in India instead of just focusing on exports, as was the case earlier.
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