In mid-October, the Brazilian Federal Revenue Service, through Consultation Solution COSIT 99002/22, took the position that mixtures of type “a” gasoline with ethanol to obtain type “c” gasoline, as well as the mixture of biodiesel with type “a” diesel, to obtain type “b” diesel, are not equivalent to the production of fuels and, therefore, do not generate the right to PIS and COFINS credits.
The debate has been gaining momentum among fuel distributors, who end up blending fuels before reselling them to gas stations. The Federal Revenue Service, however, believes that this processing isn’t equivalent to production, thus maintaining a single-phase tax regime, which, in its view, prevents taxpayers from claiming credit for the contributions. Meanwhile, the debate remains open in the courts.
