(1)Notwithstanding anything contained in this Code, the appropriate Government may, by notification, and subject to the conditions which may include the eligibility conditions to be fulfilled prior to grant of exemption and the conditions to be complied with after exemption, as may be prescribed by the Central Government in this behalf, grant exemption to an establishment or class of establishments (including factory or other establishments under the control of Central Government or State Government or local bodies) or employees or class of employees, from any or all of the provisions of this Code or the scheme framed thereunder as may be specified in the notification and may renew for further period such exemption by like notification:
    Provided that no such exemption,—
        (i) in respect of Provident Fund Scheme, Pension Scheme and Insurance Scheme, without prior consultation with the Central Board; and
        (ii) in respect of Chapter IV, without prior consultation with the Corporation, shall be granted or renewed and the Central Board or the Corporation, as the case may be, shall on such consultation forward its view to the appropriate Government within such time as may be prescribed by that Government.
    (2) The appropriate Government may, in the notification referred to in sub-section (1), specify therein conditions as may be prescribed by that Government, which the exempted establishment or the class of establishments or an employee or class of employees, as the case may be, shall comply with after such exemption:
    Provided that for the purpose of grant of exemption in respect of Provident Fund Scheme, Pension Scheme and Insurance Scheme, the terms and conditions of exemption shall be specified in such respective schemes.
    (3) The exemption granted under sub-section (1) to an establishment or class of establishments or an employee or class of employees, as the case may be, shall be initially for a period of three years from the date of publication of such notification and may be extended by the appropriate Government to the extent of such period as may be prescribed by the Central Government:
    Provided that for the purpose of grant of exemption in respect of Provident Fund Scheme, Pension Scheme and Insurance Scheme, exemption may be extended for such period as may be specified in such respective schemes.     (4) The exemption granted under sub-section (1) shall only be granted if the employees in the establishment or class of establishments or an employee or the class of employees so exempted are otherwise in receipt of benefits substantially similar or superior to the benefits provided in the provisions of the Code or the scheme framed thereunder.
    (5) For the purposes of administering the fund, managing the investments, maintaining accounts of the contributions, withdrawals, credit of interest in respect of each employee of the fund created, and any other matter specified in the scheme for any exempted establishment or class of establishments, or employees or class of employees, a board of trustees shall be constituted by the employer which will be a legal entity which can sue and can be sued and the conditions for management of the trust shall be prescribed by the appropriate Government as part of the conditions for exemption:
    Provided that conditions for administering the fund, managing the investments, maintaining accounts of the contributions, withdrawals, credit of interest in respect of each employee of the fund created, in respect of exemption from Provident Fund Scheme, Pension Scheme and Insurance Scheme shall be specified in such respective schemes.
    (6) Where an exemption is granted under this section from operation of any or all the provisions of the Code or any of the scheme under Chapter III, to any establishment, class of establishments, employee or class of employees, the employer in relation to such establishment shall furnish such returns electronically in respect of persons employed, accounts maintained in respect of employees, investments made from the fund, provide facilities for inspection and pay such inspection charges as the Central Government may direct.
    (7) If employer in relation to any establishment or class of establishments or employee or class of employees in respect of whom the exemption has been granted under sub-section (1), fails to comply with any of the conditions specified under this section, then, the appropriate Government may on such failure, cancel the exemption so granted.
    (8) Where any exemption granted under sub-section (1) is cancelled, the entire amount of surplus and reserves, if any, and accumulations to the credit of every employee, to whom such exemption applied, in the exempted fund of the establishment in which he is employed, shall be transferred to the respective statutory fund created under this Code within such time and manner as specified in the conditions for grant of exemption:
    Provided that in respect of any cancellation of exemption from the Provident Fund Scheme, Pension Scheme and Insurance Scheme, the time limit, form and manner of transfer of accumulations of exempted employees from the exempted funds to such respective funds shall be specified in such respective schemes.
    (9) Notwithstanding anything contained in this section, the employer of an establishment exempted under sub-section (1), after the resolution of the board of trustees of the establishment to that effect may make an application to the appropriate Government for surrender of the exemption granted under that subsection from the date specified in the application and the appropriate Government may on receipt of that application, allow the employer to remit the contribution in the statutory funds under this Code from the date specified in the application and process the application for cancellation of exemption and on such cancellation, the employer and the board of trustees shall transfer accumulation of each employee and surplus and reserves from the fund referred to in sub-section (5), to the concerned statutory funds under this Code within such time and in such manner as may be notified by the appropriate Government:
    Provided that in respect of any surrender of exemption from the Provident Fund Scheme, the Pension Scheme and the Insurance Scheme, the time limit, form and manner of transfer of accumulation of exempted employees and surplus and reserves from the fund referred to in sub-section (5), to the concerned statutory funds under this Code shall be such as may be specified in the concerned schemes framed under Chapter III.