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Milestone in the right to ICMS credit may influence other segments
The recent resolution of the 1st Section of the Superior Court of Justice (STJ) was a triumph for a plant that produces ethanol, sugar and energy from sugar cane. This ruling allowed it to use ICMS credits when purchasing intermediate products crucial to its operation, even if these are progressively consumed in the production cycle. Among the items benefited are mills, electrodes, oils from the production sector, bearings and others.
Understanding the impact of the decision on the tax world
The meaning of this decision goes beyond the immediate. It serves as a beacon for taxpayers amid disputes with the Tax Authorities over the interpretation of the Kandir Law, the ICMS regulatory framework. At the center of this controversy, the Tax Authorities argue that such items are not integrated into the finished product, as they are used and spent during production, and, therefore, do not justify the right to credit.
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The issue reached the STJ after the São Paulo Court of Justice refused the plant's request to register ICMS credits on intermediate products that are not immediately consumed in the production process. Contrary to this decision, the STJ took a position in favor of taxpayers. Validated the claim for credits linked to the purchase of inputs used in the production cycle, even if consumed over time, as long as their relevance to the company's main objective can be proven.
According to Henrique Munia e Erbolato, a renowned specialist in tax law at the firm Santos Neto Advogados, the decision applies the principle of non-cumulative ICMS, challenging the previously restrictive view adopted by the State Treasury. With this, the case returns to TJ-SP to assess which intermediate products are vital for the plant, thus authorizing the registration of credits. The jurist highlights: “This interpretation can be extended to other productive industries, also bringing benefits to the end consumer.”
Source: pri.costa@elacomunica.
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