Commerce Ministry to Extend Hybrid Model for IT Units in SEZs by 2 Years.

The Commerce & Industry Ministry is set to recommend a two-year extension, or potentially longer, for the hybrid working model for IT-ITeS units operating in Special Economic Zones (SEZs). This comes as the one-year extension granted last year is set to expire at the end of December. The hybrid model permits IT-ITeS units to allow their employees to work from any location outside the SEZ, provided the unit remains operational within the zone.

A senior official said, "The Ministry is ready to extend the hybrid model for more than a year, possibly for two to five years. A decision has been made on the matter." The extension will require approval from the Directorate General of Exports Promotion (DGEP), an arm of the Central Board of Indirect Taxes and Customs, after which the necessary notification will be issued.

Industry body Nasscom had previously recommended transitioning from the work-from-home model to a hybrid system, which would help maintain operations in SEZs while offering flexibility for employees to work from outside the zone. This would support both operational continuity for units and the business of real estate developers.

While the IT-ITeS industry hopes for the hybrid model to continue indefinitely, the government has expressed reluctance to allow such flexibility without a clear end date. A source noted, "While the COVID-19 situation required employees to work from home, companies like Amazon and TCS are now emphasizing the importance of office work. The government understands that more time may be needed for employees to return to offices, and is prepared to extend the hybrid model for a longer period. However, a perpetual extension does not seem necessary."

HBL