ADANIPOWER

Secures Refund as SC Overturns Duty Levy

In a landmark ruling, the Supreme Court of India has held that customs duty cannot be levied on electricity supplied from Special Economic Zones (SEZs) to the domestic market, delivering a major relief to

. The judgment overturns a 2019 Gujarat High Court decision and mandates the refund of previously collected duties within eight weeks. The verdict resolves a long-standing dispute dating back to 2010 and sets a precedent for SEZ-based power producers. 1. Supreme Court Verdict - A bench of Justices Aravind Kumar and N.V. Anjaria ruled the levy lacked legal authority. - Customs duty on SEZ-to-DTA electricity supply was deemed unauthorized and unenforceable. - The government must refund duty collected from Adani Power within eight weeks. 2. Background of the Dispute - Dispute began in February 2010 after customs rules were amended to impose duty on SEZ electricity. - Adani Power operates a 4,620 MW plant in Mundra SEZ. - Gujarat High Court’s 2015 ruling limited exemption to June 2009–September 2010, sparking further litigation. 3. Legal Journey and Appeal - Adani Power stopped paying the duty and sought refunds, arguing the levy was illegal. - In June 2019, the company appealed again, asserting no liability on SEZ-to-DTA supply. - The Supreme Court’s ruling now provides final clarity and closure. 4. Industry and Policy Implications - The judgment could impact other SEZ-based power producers and future regulatory frameworks. - It reinforces the principle that electricity is not a taxable good under customs law. - May prompt policy revisions around SEZ operations and inter-zone supply norms. 5. Financial and Operational Relief for Adani Power - Refund improves cash flow and profitability outlook. - Removes a long-standing regulatory overhang on SEZ-linked operations. - Strengthens Adani Power’s position in the domestic energy market.