tax payer backwards. In thistriangulation, it is plainly possible to admit that the Fuel Distributor doesnot collect such tax, and of course if the tax is not collected, according tothe non-cumulative fiscal principle, this fact entails the not crediting of therespective portion of the tax for compensation in the subsequent operations. Inthis scenario, a new legal covenant made in ICMS agreement # 110/2007 in 10 and 11 ofthe twenty-first clause ordains that ininterstate operations, the chargeback be made of the respective credit, corresponding to the volume of EAAF. Now, if the Fuel Distributor has no ICMS tax credit(asset) on the sales operation of the Sugar Mill, why should it pay tax in theform of reversal in interstate operations? As can be seen, it is truly the creating of a new tax, injuring theprinciples of legality, the non-cumulative fiscal principle and ability to pay.As is well known, and modeled by the constitutional act of Brazil, the creationof a new tax comes from LAW. In this regard, it remains clear that the ICMS Agreement# 110/2007 with the changes described above, does not have the power orlegitimacy to create a true hypothesis of incidence of taxes, hence themanifestation of the National Confederation of Commerce by the declaration ofunconstitutionality of the said ICMS agreement, with new wording that went onto create a new tax and without constitutional provision and Law thatlegitimates it for this end.However,we find that there is still no definitive positioning of the Supreme Court onthe matter. In analysis, it was not even allowed to suspend the effectivenessof the legal standard under the mantle of the provisional remedy applicationbrought. However, even though the current tax rule is in effect, there is nodoubt that this fact remains to cause a strong financial impact sustained bythe Fuel Distributors with the expenditure of funds for the payment of this new"tax" instituted in the form of "reversal" on gasoline C,whose demand for consumption has been constantly growing in Brazil. Withoutfurther digression, it is not the role of the country's Supreme Court tointervene politically in social issues, with decisions not associated to itseminently Constitutional Law, but to deal with the obscurities of the law and bekeeper of the Federal Constitution in a clear way, equidistant and enshrinedwithin the principles guided by itself.The discussionwith respect to the declaration of unconstitutionality of the norm is far froman end, the Reporter of the ADI (Unconstitutionality Declaration Lawsuit),Minister Ellen Gracie, now retired, voted in favor of the declaration ofunconstitutionality, but the trial is still pending the votes of otherMinisters, which already add up to two votes against it, thus reiterating thepossibility of permanency of the unconstitutional "new tax". Againthe National Tax System is put to the test! Sneaked in a dark alley, on onehand, by the insatiable hunger of state revenues, on the other, by the light ofjustice and constitutional fiscal rules that insist on shining! Evandro G. Estebanez, is a Brazilian Tax Lawyer,expert in Oil & Gas, Member of Brazilian Tax Law Society and FounderPartner of Brastax Consulting Company. e-mail: ege@brastax.com