Supreme Tribunal rules that JBS is not entitled to presumed credit on state sales tax
JBS has lost a lawsuit against a decree by the State of Mato Grosso, which prevented meat exporters from taking advantage of a tax break on state sales taxes (ICMS). With Decree No. 12056, 2006, companies that sell only within the state had a right to a presumed credit of 50% on the tax rate. As most taxpayers paid ICMS at the reduced rate of 4%, the presumed credit would be 2%.
JBS - as well as other export companies - was ineligible. "There has been a clear affront to equality, because the company is not competing equally on the state market," said the company's lawyer, Fábio Augusto Chilo, during the defense. In the case, heard on Tuesday, June 26, all the judges in the 2nd Chamber of the Superior Tribunal of Justice (STJ) accepted the argument put forward by the Treasury Department of Mato Grosso. They understood that the decree was intended to alleviate inequalities between large and small slaughterhouses in the state.
The rapporteur on the case, Humberto Martins, said the principle of equality must be qualified by the ability to pay. "The applicant [JBS] would have a greater advantage over small companies in the meat sector," he said. In addition, exporters have already benefited by not having to pay taxes on exports.
Information provided by Valor Econômico