The Goiás State Court of Justice (TJGO) ruled that the ICMS tax on electricity compensated under the distributed generation (DG) model is unconstitutional. The ruling was reached by Judge Aureliano Albuquerque Amorim in a decision issued on September 10.
The ADI (Direct Action of Unconstitutionality) was filed by the União Brasil and MDB parties against the state of Goiás. The aim was to challenge the interpretation of state law that allowed ICMS to be levied on excess energy generated, injected into the grid, and subsequently offset by consumer-generators.
According to the decision, “the electricity delivered by the distributor to the consumer-generator, as compensation for credits, does not constitute a purchase and sale transaction, nor a supply per se, but merely the return of the excess energy provided free of charge, in the form of a loan, to reduce the amount of the monthly bill”.
Amorim also highlighted that “if there is no onerous transfer of ownership of the energy, but only a free loan for future compensation, there is no need to talk about the incidence of ICMS – an understanding already consolidated in previous judgments of this Court”.
In late 2024, following the interpretation by the Goiás State Treasury and the concessionaire Equatorial Goiás that resulted in the start of the tax on surplus energy, a movement was initiated by representatives of the energy sector to engage with state representatives to demonstrate that the charge should be considered undue. This understanding was preliminarily accepted in a decision issued on January 29, 01, by the TJGO, which has since suspended the ICMS charge on a provisional basis.
For the judge, it is “wrong to attribute to the free loan of surplus energy, subsequently compensated, the legal nature of a commercial transaction, which distorts the constitutional concept of circulation of goods”.
He concluded that the collection of ICMS within the scope of the SCEE (Electric Energy Compensation System) “unduly burdens the consumer-generator and reduces the economic benefit of distributed generation, discouraging investments in renewable energy sources”.
Source: Court of Justice of the State of Goiás TJGO
For João Felipe Prado, president of the Goiana Distributed Generation Front, the decision demonstrates a clear understanding of the energy compensation modality of Distributed Generation, and becomes a milestone for other states to follow this same understanding.
João Prado also believes that the positive ruling on the case brings legal and economic security to the thousands of consumers in Goiás who invest and believe in solar energy as a safe and affordable source for energy efficiency and transition.
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