SC Scraps Customs Duty on Adani Power Electricity Supplies to Domestic Market

As per The Economic Times report, the Supreme Court has ruled that Adani Power is not required to pay customs duty on electricity provided from its Mundra Special Economic Zone to the domestic market.  

This decision overturns a 2019 order from the Gujarat High Court and ensures the refund of all duty collected between September 16, 2010, and February 15, 2016. 

Supreme Court Overrules Gujarat HC on SEZ Electricity Duty 

On January 6, 2026, a bench of Justices Aravind Kumar and NV Anjaria declared that Adani Power is exempt from paying customs duty on power sales from its 5,200 MW thermal plant in Mundra SEZ to buyers in the domestic tariff area.  

The bench concluded that Gujarat High Court failed to follow a related 2015 Supreme Court ruling that had earlier granted the company relief. 

As per current SEZ rules, sales from an SEZ to the domestic tariff area are considered imports, and thus, customs duty applies by default. However, the apex court held that duty demands for the period between September 16, 2010, and February 15, 2016, lacked proper legal basis in this particular case. 

Evolution of Duty Structure on SEZ Electricity Supply 

Initially, electricity was not subject to customs duty when supplied from SEZ units. In 2010, the central government imposed a 16% ad valorem duty on power sold from SEZs to domestic regions.  

2 years later, the duty method shifted to a specific rate of ₹0.10 per unit, applicable retrospectively from September 16, 2010. This rate was subsequently reduced to ₹0.03 per unit. 

In 2015, both Gujarat High Court and Supreme Court found Adani Power eligible for exemption from duty between June 26, 2009, and September 15, 2010. However, the dispute extended to the period after that exemption, leading the company to approach the courts again. 

Read More: Adani Group’s Logistics Arm Leases Panvel Warehouse to DMart for 28 Years! 

Refund Directed Without Interest 

The Supreme Court has instructed the power ministry and customs authorities to return the amount already deposited by Adani Power against the earlier demand, with no interest applicable. The refund must be processed within 8 weeks from the date of the order. 

Portions of the electricity generated at the facility are consumed inside the SEZ, while the remainder is supplied to external buyers in the domestic market, triggering the earlier customs duty issue. 

Adani Power Share Price Performance  

As of January 06, 2026, at 9:16 AM, Adani Power share price on NSE was trading at ₹148.03 up by 1.25% from the previous closing price. 

Conclusion 

The Supreme Court’s ruling has definitively settled the matter, lifting the customs duty on power supplied by Adani Power from Mundra SEZ to the domestic market during 2010–2016 and ensuring refund of previously deposited sums. 

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