Adani Power gets major victory from Supreme Court, clears way for refund of up to Rs 500 crore, keep an eye on stock

News Topical, Digital Desk : Adani Power has received a major legal and financial relief from the Supreme Court. The ongoing dispute over customs duty on electricity shipped from the Mundra SEZ to other parts of the country now appears to be resolved in the company's favor. The Supreme Court has clarified that no customs duty is levied on such electricity. Adani Power has also been directed to refund the amount previously paid. Let's understand the entire story in simple terms.

The Supreme Court of India has ruled in favor of Adani Power in a significant case related to the power sector. The dispute involved electricity produced in the Mundra Special Economic Zone (SEZ) and supplied to the Domestic Tariff Area (DTA). The Supreme Court clearly stated in its ruling that electricity generated in the Mundra SEZ, when shipped outside the SEZ, i.e., to the DTA, cannot be subject to customs duty. The court also stated that electricity is not a commodity that warrants such customs duty, as the relevant authorities had been doing. Along with this ruling, the Supreme Court issued another important directive: the court ordered a refund of all customs duty paid by Adani Power in this case. This means the company will receive a direct financial benefit. This case is considered significant because the authorities had previously argued that customs duty was applicable on electricity supplied outside the SEZ. On this basis, Adani Power was held back for a long time. The company challenged this decision in the Supreme Court. During the hearing, lawyers representing Adani Power told the court that if the decision is in the company's favor, a refund of up to ₹500 crore could potentially be obtained. Now, with this clear Supreme Court order, the claim that the company could receive a significant refund has become even stronger. Relief for many other companies : According to legal experts, this decision could be significant not only for Adani Power, but for all power producers who generate electricity under SEZs and supply it to the domestic market. This will bring clarity regarding tax and customs duties in such cases in the future. The Government of India argued that customs duties should be levied on supplies outside SEZs. However, the Supreme Court rejected this argument and clearly stated that there was no legal basis for imposing customs duties in this case. From a stock market perspective, this decision could be considered positive for Adani Power sentiment. On one hand, the company will potentially receive a refund of hundreds of crores of rupees, and on the other hand, it will also be relieved of such liabilities in the future. This could strengthen both the company's cash flow position and balance sheet. Overall, this Supreme Court decision answers a major question related to taxation in the power sector. For Adani Power, this is not only a legal victory but also a significant step towards financial strength.

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