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The decision of Minister Luiz Fux, of the STF, has been causing discussions in the Brazilian energy market regarding its impacts. The country's states can now resume charging ICMS tariffs on the transmission and distribution of electricity.
For this Tuesday, (14/03), the national energy market is witnessing an important and controversial decision by the Federal Supreme Court (STF). Responding to a request from CONPEG (National College of Attorneys General of the States and Federal District), Minister Luiz Fux approved the resumption of the collection of ICMS tariffs on transmission and distribution of electricity in Brazil. As a result, product prices may suffer strong impacts over the next few months.
STF decision regarding the return of ICMS collection on the transmission and distribution of electricity causes discussions in the national energy market
The Brazilian energy market has been undergoing major investments and strong heating over the last few years. Now, a decision by the STF can shake the current scenario of the sector.
After the approval of the request by CONPEG (National College of Attorneys General of the States and Federal District), by Minister Luiz Fux, the Brazilian states will be able to charge ICMS tariffs again on the transmission and distribution of electricity.
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Since 2021, the tariffs for the transmission and distribution of the resource had been withdrawn from the collection of the states, since these do not generate a taxable event for the levy of the referred tax.
However, the decision of the STF minister may cause a strong change in the current energy market.
Kaline Kiareli Pinheiro, tax specialist and coordinator of NWGroup's Energy Center, highlighted that the judgment is still pending in the STJ (Supreme Court of Justice), and that this is a discussion that should last in the legal scenario.
“What is surprising in this decision by Minister Fux is that at no time was the fact mentioned that the STF itself, in General Repercussion, judged in 2021 a similar theme – theme 176 that dealt with the incidence of ICMS on the charge of the contracted demand in the electricity bill — where contracted demand is equivalent to the physical structure that transports the energy: wires, cables, poles and transformers,” said the tariff specialist.
Energy engineering market criticizes decision to charge ICMS on electricity distribution and transmission in Brazil
Although this subject is generating controversy regarding its reliability in the legal field, for electrical engineering, this is a simple calculation.
Sector specialists point out that the transmission and distribution of electrical energy cannot be confused with the product itself. The physical structure for the arrival of this resource to the population cannot be understood as an extension of what is being purchased.
Kaline Kiareli Pinheiro also commented on how this STF decision could harm state revenue and the current scenario of the energy market.
For her, it is not being considered the possible damage to the population, which is improperly paying the ICMS collection on the products.
The decision is still being analyzed in the legal scope and the STF may give new updates on the collection of ICMS tariffs on electricity in the coming weeks.
