CARF restricts IPI tax credits for industrial inputs

The Administrative Council of Tax Appeals (CARF) has reinforced a restrictive interpretation regarding the use of IPI (Tax on Industrialized Products) credits for industrial inputs. In a recent ruling involving a cement industry, the council maintained the denial of credits for several materials used in the production process.

According to the decision, materials such as petroleum coke were classified as fuel for thermal energy generation rather than intermediate products. Additionally, grinding bodies were categorized as machine parts, and items like refractory materials, filter sleeves, and screws were deemed to have functions related to protection, environmental control, or equipment fixation rather than direct action on the manufactured product. Conveyor belts were also excluded as they are used in extraction and movement stages prior to industrialization.

The ruling emphasizes that for a material to qualify for IPI credit, it must undergo direct, immediate, and integral wear during the manufacturing of the product. This decision aligns with established understandings held by CARF and the Superior Court of Justice (STJ).