Since December 2017, it is pending judgment at the Superior Court of Justice (“STJ”), under the regime of Repetitive Appeals (Topic No. 986), the non-levy of ICMS on transmission and distribution services and charges linked to transactions with electric energy, among them: the Tariff for the Use of the Electric Power Transmission System (“TUST”) and the Tariff for the Use of the Electric Power Distribution System (“TUSD”). In summary, it is discussed what is the appropriate taxable basis for calculating ICMS on electric energy: the value of the electric energy consumed or the value of the transaction, which would include the aforementioned tariff charges.

The discussion gained a new chapter with the publication of Complementary Law No. 194/2022 (“LC 194/2022”), which defined that ICMS is not levied on said tariff charges. It so happens that some States have not yet adapted their legislation to that established by the LC, and the charge remains at a higher value than what is actually due, which can be questioned in court due to the fact that the LC must be observed since its publication. Therefore, there are currently two distinct situations that must be observed by consumers:
(i) from June 2022, ICMS cannot be charged on tariff charges (TUSD / TUST);
(ii) before June 2022, exclusion of such charges from ICMS taxable basis and refund of amounts unduly paid (linked to the future decision of the STJ, preventing possible modulation of effects).

Based on the above, we recommend that (i) the electric energy bill to be checked to confirm whether ICMS is being charged on the total amount of the bill; or only on the amount corresponding to the electric energy actually consumed, excluding tariff charges (TUST , TUSD, tariff flags, and others), thus avoiding the taxation of undue amounts by the States; and (ii) to file a judicial suit to protect the right to non-payment and reimbursement for the last 5 years until the publication of LC 194, in the event of a favorable decision on the matter by the STJ.

By Henrique Erbolato