The Full Board of the Federal Supreme Court decided that the charge of ICMS on the supply of treated water by concessionaries is unconstitutional. The decision was rendered upon judgment of Extraordinary Appeal n. 607,056/RJ, judged under the general repercussion systematic.

The judgment had been interrupted in September, 2011, due to Justice Luiz Fux’s request to analyze the records, after Reporting Justice Dias Toffoli issued his vote denying relief to the Extraordinary Appeal filed by the State of Rio de Janeiro.

In its appeal, the State of Rio de Janeiro argued that ICMS could levy on the supply of water since it is a fungible and consumable good, essentially alienable, that can be traded.

However, as provided in the winning vote issued by Justice Dias Toffoli, the water is a public good, and not merchandise, so its supply must be considered a rendering of essential public service, which is not subject to ICMS imposition. Only Justices Marco Aurélio Mello and Ricardo Lewandowski diverged from this opinion, and accepted the charge of state tax.

(RE n. 607,056. Available at: <>. Accessed in: May 2013).