MODVAT input eligibility for silicone spray used in moulding was accepted as a consumable manufacturing aid.

Silicone Spray used in injection moulding as a lubricant and release aid was treated as an eligible MODVAT input because it was consumed in the manufacturing process and improved productivity and quality. The Tribunal applied the accepted scope of "input" under Rule 57A and noted that an item need not form part of the final product to qualify. On that reasoning, the spray was not regarded as an appliance or equipment excluded from MODVAT benefit, and consumable items used in manufacture were recognised as eligible inputs.

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Issues: Whether Silicone Spray used in injection moulding for lubrication and release of moulded components is an eligible input for MODVAT credit, or is excluded as an appliance or equipment under Rule 57A.

Analysis: The Tribunal found that Silicone Spray, being a chemical used on the mould to provide a film of lubrication and assist automatic release of the moulded component, was used in the manufacture of the final product and improved productivity and quality. Applying the accepted scope of the term "input" under Rule 57A, and noting that it is not necessary for an input to form part of the final product, the Tribunal held that Silicone Spray could not be treated as an appliance or equipment excluded from MODVAT benefit. The reasoning was supported by earlier Tribunal decisions recognising consumable items used in the manufacturing process as eligible inputs.

Conclusion: Silicone Spray was held to be an eligible input for MODVAT credit and not excluded as an appliance or equipment.

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