No Export Duty On Transfer From Domestic Tariff Area To SEZ : Supreme Court Dismisses Union’s Appeal Against Adani Power

The Supreme Court has held that moving goods from a Domestic Tariff Area (DTA) to a Special Economic Zone (SEZ) does not amount to an “export” under the Customs Act, 1962, for the purpose of levying export duty. In doing so, the Court dismissed the Union of India’s appeal against Adani Power and others. The Union had contended that SEZs are treated as foreign territory for trade operations, and thus such transfers should be subject to export duty. However, the companies and the Gujarat High Court argued that SEZ Act, 2005 gives express definitions and SEZ supplies from DTA are domestic supplies. The Supreme Court agreed, finding that the statutory definition and scheme treat DTA→SEZ transfers differently from exports outside India. Thus, the appeal was overturned, and Adani Power (and similarly placed entities) are not liable for export duty on such transfers.