UPSC Prelims Practice Questions — SC grants relief to Adani, sets aside levy on SEZ electricity

Q1. In the context of India's Special Economic Zones regime, what is meant by the term 'Domestic Tariff Area' (DTA)?

• A. The notified area within an SEZ earmarked for residential and commercial use by SEZ employees and their dependants
• B. The whole of the territory of India but does not include the areas of the Special Economic Zones
• C. A foreign territory where exports from Indian SEZs receive preferential tariff concessions under bilateral trade pacts
• D. The notified seaport and airport zones where customs duties are collected at concessional rates on SEZ-bound imports

Q2. Within which one of the following Special Economic Zones is located Adani Power's 4,620 MW coal-based thermal power plant that was the subject of the Supreme Court's January 2026 ruling on customs duty?

• A. Mundra SEZ, Gujarat
• B. Kakinada SEZ, Andhra Pradesh
• C. Krishnapatnam SEZ, Andhra Pradesh
• D. Dahej SEZ, Gujarat

Q3. With reference to the January 2026 judgment of the Supreme Court in the Adani Power case vis-à-vis the 2019 judgment of the Gujarat High Court on customs duty on electricity supplied from SEZ to DTA, consider the following statements: 1. The 2019 Gujarat High Court had upheld the levy of customs duty on such electricity, whereas the 2026 Supreme Court has set aside the levy. 2. The Supreme Court, departing from the High Court, held that the levy lacked statutory authority and had no valid charging event under the Customs Act, 1962. 3. The Supreme Court, reversing the High Court on this point, held that Section 25 of the Customs Act, 1962 empowers the Central Government to impose fresh customs levies in addition to granting exemptions. Which of the statements given above is/are correct?

1. The 2019 Gujarat High Court had upheld the levy of customs duty on such electricity, whereas the 2026 Supreme Court has set aside the levy.
2. The Supreme Court, departing from the High Court, held that the levy lacked statutory authority and had no valid charging event under the Customs Act, 1962.
3. The Supreme Court, reversing the High Court on this point, held that Section 25 of the Customs Act, 1962 empowers the Central Government to impose fresh customs levies in addition to granting exemptions.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q4. With reference to the statutory framework underlying the Supreme Court's 2026 Adani Power ruling on SEZ electricity, consider the following statements: 1. Section 53 of the SEZ Act, 2005 deems a Special Economic Zone to be a territory outside the customs territory of India for the purposes of authorised operations. 2. Section 30 of the SEZ Act, 2005 provides that goods cleared from an SEZ to the Domestic Tariff Area are chargeable to duties as if such goods had been imported into India. 3. Section 12 of the Customs Act, 1962 is the charging provision under which customs duty is levied on goods imported into, or exported from, India. 4. Section 25 of the Customs Act, 1962 empowers the Central Government to impose fresh customs duties on goods that are not covered by the tariff schedule. Which of the statements given above are correctly identified?

1. Section 53 of the SEZ Act, 2005 deems a Special Economic Zone to be a territory outside the customs territory of India for the purposes of authorised operations.
2. Section 30 of the SEZ Act, 2005 provides that goods cleared from an SEZ to the Domestic Tariff Area are chargeable to duties as if such goods had been imported into India.
3. Section 12 of the Customs Act, 1962 is the charging provision under which customs duty is levied on goods imported into, or exported from, India.
4. Section 25 of the Customs Act, 1962 empowers the Central Government to impose fresh customs duties on goods that are not covered by the tariff schedule.

• A. 1, 2 and 3 only
• B. 1 and 3 only
• C. 2 and 4 only
• D. 1, 2, 3 and 4

Q5. In its January 2026 judgment granting relief to Adani Power, within how many weeks did the Supreme Court direct the jurisdictional Commissioner of Customs to verify the claims and issue refunds of the customs duty collected on SEZ-to-DTA electricity?

• A. Four weeks
• B. Six weeks
• C. Eight weeks
• D. Twelve weeks