Facade of the headquarters building of the Federal Supreme Court – STF.| Photo: Marcello Casal Jr/Agência Brasil.

The Federal Supreme Court (STF) decided, unanimously, that the changes in the rules that deal with the collection of the Tax on Circulation of Goods and Services (ICMS) in interstate operations and installments are valid. As a result, Direct Action of Unconstitutionality 7158, presented by the Federal District government, which questioned the changes, was rejected, informed Agência Brasil.

For the district government, the rule that determines the criteria for the ICMS Rate Differential (Difal/ICMS) would be out of step with Constitutional Amendment (EC) 87/2015. The new rule provides that the Difal, the difference between the interstate rate and the internal rate of the state, will be up to the state where the final consumer is located, that is: where the physical goods enter or the end of the service provided, even if the acquirer resides elsewhere.

For the rapporteur of the action, Minister Luís Roberto Barroso, by stipulating this definition, the law (Complementary Law 87/1996, better known as the Kandir Law) seeks a better distribution of ICMS collection, in addition to avoiding conflicts between producing and consuming states , which is also provided for in Constitutional Amendment 87/2015.

“I propose the establishment of the following thesis: The criterion provided for in § 7 of Art. 11 of Complementary Law No. 87/1996, as amended by Complementary Law No. 190/2022, which considers as the recipient State, for the purpose of paying the ICMS rate differential, the one in which the physical entry of the goods actually occurs or the end of the provision of the service, since in accordance with Constitutional Amendment No. 87/2015”, wrote the rapporteur in the decision.