AGU asks for suspension of Confaz agreement to avoid full ICMS charge on diesel

The Attorney General’s Office (AGU) presented, on the night of this Friday (20), an addition to the request already made in action against an agreement of the National Council of Finance Policy (Confaz) that defined the ICMS rates that each State charges on the diesel.

In practice, the AGU asked that the entire agreement be suspended. In the opening piece, the government had asked for the suspension of two clauses of the Confaz act, which established the so-called “equalization factor”.

The National Council for Finance Policy, in its agreement, established a maximum rate of R$ 1.006 on diesel, with the possibility for states to establish the “equalization factor”, which is nothing more than a discount on top of this maximum value. In practice, the different rates charged in the states of the country would be maintained.

In the new piece presented on the night of this Friday (20), the AGU alleges that “what is observed, after all, is that the suspension of the fourth and fifth clauses of Convention No. act, making its “sliced” application impossible and impracticable, to the point that it can be said that the annulment of the aforementioned clauses implies, by dragging on, the uselessness of the other provisions of the normative act”.

For the AGU, “setting a single rate at a disproportionately high level would contradict not only the social purpose of LC No. 192/2022”.

In the new request submitted, the government stated that the agreement made by Confaz “intended to continue a dysfunctional, federatively asymmetric and unfairly burdensome tax system for the taxpayer”.

“It so happens that, if Convention No. 16/2022 CONFAZ comes into force with only the remaining part of its provisions, in particular its Annex I, without being properly adjusted by the decision-making body that produced it, it could have consequences practices even more deleterious than those that would be generated by its full validity”, justifies the AGU.

Minister André Mendonça, rapporteur of the action in the STF, granted the preliminary injunction (provisional) initially requested by the government, suspending parts of the agreement.

A new impasse arose from then on, as there was a fear that, with the suspension of the sections that regulated the equalization factor, the maximum ICMS rate would be charged on diesel, which, in practice, would lead to an increase in the price of fuel.