The São Paulo Administrative Court, which resolves disputes between the State Treasury and taxpayers, has recognized companies’ right to claim ICMS (Tax on Circulation of Goods and Services) credits on the acquisition of intermediate products.

This ruling is based on a decision by the Superior Court of Justice (STJ), which upheld the right to ICMS credits for intermediate products, provided they are essential to the establishment’s core activities. The ruling also dismissed concerns over the timing of their use, whether immediate or prolonged.

Intermediate products are those consumed during the industrial process that, although not part of the final product’s physical structure, are essential to the establishment’s core activities. It is important to note that intermediate products differ from those classified as for use or consumption, as the latter refers to items unrelated to the establishment’s commercial or industrial activities.

These decisions have significantly broadened the scope for claiming ICMS credits. Companies can now claim credits for goods and materials used in the production process, even if these materials are not fully or immediately consumed, as long as their essential role in the business activity is proven.