Since the STJ assessed the concept of input for PIS and COFINS crediting purposes, establishing the criteria of relevance or essentiality, it has been noted that the Federal Revenue has increasingly adopted less restrictive interpretations. It is in this context that expenses, until then not admitted for generating credits, have been assessed from the perspective of what is effectively relevant and essential to the production process.

Within the relevance criterion, it is possible to highlight those items that, although not essential to the development of the product itself or the provision of the service, are part of the production process, either due to the peculiarities of the production chain itself or due to legal imposition.

This aspect of legality may include expenses related to environmental treatment, which, by constitutional provision, as well as by scattered legislation, must be incurred by companies, and failure to comply may result in severe penalties. It is worth mentioning that Law No. 9,605/98, which provides for sanctions arising from conduct and activities that are harmful to the environment, defines the discharge of waste without adequate treatment as a crime.

Recently, the Federal Revenue Service admitted, for the first time, the possibility of using PIS and COFINS credits, by companies classified in the non-cumulative regime, on expenses with the treatment of effluents, industrial waste and wastewater, considered essential to the viability of business activity.

The understanding is contained in Consultation Solution No. 1, issued in January of this year by the General Coordination of Taxation (Cosit), which binds all inspections, and was issued based on a consultation submitted by a leather industry. According to the consultation, the company alleged that, due to the activity carried out, waste is generated in the leather treatment process, and that the appropriate treatment of such effluents is essential for production and finishing in a sustainable manner that does not harm the environment, in compliance with the provisions of environmental legislation.

In other words, as highlighted by the consultant, the adoption of environmental preservation measures, such as waste treatment, is an essential condition for obtaining a license to carry out activities.

The importance of this understanding expressed by the Federal Revenue Service is due to the fact that other companies that have expenses related to environmental treatment, by imposition of the law, may claim the same benefit, such as industries in the pharmaceutical and food sectors.

However, it is important to make it clear that, although the RFB has admitted the appropriation of PIS and COFINS credits in the case under discussion, explaining reasoning that denotes greater scope for the concept of inputs in relation to waste, the relevance of the expense in the production process must always be demonstrated on a case-by-case basis, in order to avoid questions from the tax authorities.