There are now 21 state regulations that have been invalidated for failing to respect the principle of selectivity, which prohibits higher rates for essential services.
The Brazilian Supreme Federal Court (STF) invalidated rules from the states of Mato Grosso do Sul, Rio Grande do Norte and Espírito Santo that set the tax rate for the Circulation of Goods and Services Tax (ICMS) for electricity and telecommunications at a higher level than that for operations in general. The unanimous decision was made in the virtual session that ended on 11/25, in the judgment of three Direct Actions of Unconstitutionality (ADIs 7109, 7121 and 7125) filed by the Attorney General of the Republic, Augusto Aras.
Essential services
In a vote in favor of the requests, Minister André Mendonça, rapporteur for ADIS 7121 (RN) and 7125 (ES), highlighted that, when judging Extraordinary Appeal (RE) 714139, with general repercussions (Theme 745), the STF established the thesis that, due to essentiality, the ICMS rates levied on these services cannot be higher than that set for operations in general.
In turn, Minister Gilmar Mendes, rapporteur of ADI 7109 (MS), recalled that the Court has decided this way in cases where the state legislator adopted selectivity when regulating the ICMS, but established higher rates for electricity and communication services than those applicable to operations in general.
Modulation of effects
Also as established in the judgment of RE 714139, the decisions will be effective as of the 2024 fiscal year. The measure takes into account the legal certainty and social interest involved in the issue, due to the repercussions for taxpayers and the Public Treasury of the three states, which, in addition to the drop in revenue, may be forced to return the amounts overpaid. The consensus is that the modulation standardizes the treatment of the matter for all federative entities.
States
21 of the 25 actions filed by the PGR against local laws setting ICMS rates for energy and telecommunications above the general rate have already been judged. Previously, similar standards were invalidated in the Federal District (ADI 7123), Santa Catarina (ADI 7117), Pará (ADI 7111), Tocantins (ADI 7113), Minas Gerais (ADI 7116), Rondônia (ADI 7119), Goiás (ADI 7122), Paraná (ADI 7110), Amapá (ADI 7126), Amazonas (ADI 7129), Roraima (ADI 7118), Sergipe (ADI 7120), Pernambuco (AID 7108), Piauí (ADI 7127), Acre (ADI 7131), São Paulo (ADI 7112, Bahia (7128) and Alagoas (7130).
Source: https://portal.stf.jus.br/noticias/verNoticiaDetalhe.asp?idConteudo=498377&ori=1