The Legal Counsel Office of the Republic (Advocacia Geral da União – AGU) acknowledged that the state of destination charging the interstate ICMS upon the sales of goods from one state to an end consumer is unconstitutional. According to the AGU, in opinion in Direct Action for Unconstitutionality filed against CONFAZ Protocol n. 21/2011, the charging of the ICMS also by the state of destination violates the constitutional principle of non-differentiation of taxation by virtue of the product origin, in addition to establishing double taxation of property and goods.

According to the AGU, Protocol n. 21/2011 is unconstitutional precisely because it violates constitutional principles and determines that part of the interstate ICMS over purchases accomplished by an end consumer will be collected to the state of destination, when the Brazilian Constitution determines that, in these cases, it is entirely due to the state of origin. Additionally, the system brought by Protocol n. 21/2011 leads to double taxation of the interstate operation because, in those situations, the tax is demanded both at the state of origin of the property and goods and at destination, which violates provision in article 155, article 2, item VII, line „b‟, of the 1988 Federal Constitution.

(Conjur, 26.02.2013).