By six votes to two, the counselors of the 1st Panel of the 2nd Chamber of the 3rd Section of the Administrative Council of Tax Appeals (Carf) understood that a product incorporated by a machine, after an industrialization process, must follow the tax classification of the final product. The collegiate applied to the case notes 3 and 4 of Section XVI of the Table of Incidence of the Tax on Industrialized Products (TIPI).<\/p>\n\n\n\n
The process returned to the agenda after a request for review by councilor Mara Cristina Sifuentes.<\/p>\n\n\n\n
The company Stara S\/A Ind\u00fastria de Implementos Agr\u00edcolas imports GPS and incorporates it into agricultural machinery. The inspection understood that based on the rules of the Harmonized System of Description and Coding of Goods, this GPS \u2014 even though it had been incorporated into a specific good \u2014 would continue to be classified as such and, therefore, should be subject to IPI at the rate of the isolated product.<\/p>\n\n\n\n
For the taxpayer, from the moment this GPS is incorporated into the product, it begins to be classified as the final product. \u201cThere is an evident industrialization process that justifies taxation on the implement, and not on the separate GPS,\u201d said attorney Camila Gon\u00e7alves de Oliveira, in oral argument.<\/p>\n\n\n\n
The rapporteur, counselor H\u00e9lcio Lafet\u00e1 Reis, understood that GPS should have a tax classification as an isolated product, and the tax rate for the product should be collected separately. To this end, he based himself on note 2-A of Section XVI of the TIPI.<\/p>\n\n\n\n
Councilor Mara Cristina Sifuentes raised a dissenting opinion. According to her, according to notes 3 and 4 of Section XVI of the TIPI and the Explanatory Notes of the Harmonized System of Designation and Coding of Goods (NESH), the different elements should be considered as forming a single body and classified according to their main function, which in this case is the tax classification of the agricultural machinery. Therefore, taxation would occur on the final product, with the rate determined for the category.<\/p>\n\n\n\n
The judge considered that the scores applied by the rapporteur would not be appropriate, since they would only be used in the case of the sale of parts of products, whereas what was sold in this case was a product as a whole. Five other counselors agreed with her.<\/p>\n\n\n\n
The case number is 11030.001132\/2008-83.<\/p>\n\n\n\n