Commonwealth Numbered Regulations - Explanatory Statements

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DAIRY ADJUSTMENT LEVY COLLECTION REGULATIONS 2000 2000 NO. 98

STATUTORY RULES 2000 No. 98

Issued by the Authority of the Minister for Agriculture, Fisheries and Forestry

Dairy Produce Act 1986

Dairy Adjustment Levy Collection Regulations 2000

The Dairy Industry Adjustment Act 2000 amended the Dairy Produce Act 1986 (the Act) to provide for the Dairy Industry Adjustment Program (DIAP). and establish the Dairy Adjustment Authority (DAA) to administer the Dairy Structural Adjustment Program (DSAP).

The main object of the DIAP is to provide dairy farmers with resources to help them adjust to the deregulation of State based farm gate price controls for market milk. The cost of the DLAP will be met by the Dairy Adjustment Levy, which will be applied to milk based beverages sold domestically in Australia.

Section 126 of the Act provides that the Governor-General may make regulations necessary or convenient to be prescribed for the purposes of the Act. Part 4 of Schedule 2 to the Act contains provisions that the Regulations may prescribe matters related to the collection of the Dairy Adjustment Levy.

The Dairy Adjustment Levy is imposed by the Dairy Adjustment Levy (Excise) Act 2000, the Dairy Adjustment Levy (Customs) Act 2000 and the Dairy Adjustment Levy (General) Act 2000.

The Dairy Adjustment Levy is scheduled to commence on 8 July 2000, and will cease on a date that the Minister announces in the Gazette, once the Minister is satisfied that all costs associated with the DIAP will be met within 28 days of that date. The Regulations:

- prescribe what is not a manufacturing process for purposes of levy collection, as the last process performed on a product identifies the agent to collect the levy on behalf of the Commonwealth;

- identify those milk products that are exempt from the levy;

- describe procedures and timing of levy collection that take into account invoice arrangements between agents and sub-agents involved in the supply of leviable milk products;

- set out the details to be provided to the Commonwealth by the collection agent or collection sub-agent in the event there has been a failure to comply with the levy;

- set out details required in levy receipts in order to demonstrate compliance with the levy, and assist auditing by the Commonwealth;

- identify procedures to obtain an exemption from the requirement to issue a receipt for levy payment, and the prescribe circumstances in which an exemption may be granted;

- set out details required in a levy return to provide information on leviable milk products and levy payments, and assist auditing by the Commonwealth; indicate how to lodge payment or remittance of the levy to the Commonwealth; and

- allow for review of decisions regarding an exemption from the requirement to issue a receipt, or decisions regarding requests for the refund of a levy payment.

Details of the Regulations are provided in Attachment A.

The Regulations commence on gazettal.

Attachment A

Dairy Adjustment Levy Collection Regulations 2000

       Attachment to the Explanatory Statement

Regulation 1 gives the name to the proposed regulations as the Dairy Adjustment Levy Collection Regulations 2000.

Regulation 2 prescribes that the proposed regulations will commence on gazettal.

Regulation 3 provides definitions of terms used in the proposed regulations.

Regulation 4 provides for further cases, beyond that already contained in clause 88 of Schedule 2 to the Dairy Produce Act 1986 (the Act), relating to operations on a product that are not considered a process. The clarification of what is a process is important, as the last process performed on a product identifies, for the purposes of the levy, the entity that will be the Collection Agent for the Commonwealth in a particular product chain.

Regulation 5 provides for exemptions for certain milk products from the levy.

Regulation 6 provides the timing for remission of the levy by a collection sub-agent to the collection agent in a simple supply chain. It is recognised that the sub-agent may need to pay the collection agent for the leviable milk product before they receive levy payments from the retailer, who is liable for the levy. This proposed regulation provides that:

- if the sub-agent must pay the collection agent for the product before they have received any levy payments from the retailer, then they must remit the levy to the collection agent on or before the 28th day of the month after they have received the levy payment from the retailer;

- if the sub-agent is yet to pay the collection agent for the product when they receive levy payments for that product from the retailer, then the sub-agent must remit the levy to the collection agent at the same time they pay the collection agent for the product.

Regulation 7 provides for levy remission by the lowest ranking sub-agent in a complex supply chain (with multiple sub-agents). It is recognised that the lowest ranking sub-agent may need to pay the next highest sub-agent for the leviable milk product before they receive levy payments from the retailer, who is liable for the levy. This proposed regulation provides that:

- if the lowest ranking sub-agent must pay the next highest sub-agent for the product before they have received any levy payments from the retailer, then the lowest ranking sub-agent must remit the levy to the next highest sub-agent on or before the 28th day of the month after they have received the levy payment from the retailer;

- if the lowest ranking sub-agent is yet to pay the next highest sub-agent for the product when they receive levy payments for that product from the retailer, then the lowest ranking sub-agent must remit the levy to the next highest sub-agent at the same time they pay the next highest sub-agent for the product.

Regulation 8 provides for levy remission by a sub-agent in a complex supply chain (with multiple sub-agents). It is recognised that the sub-agent may need to pay the next highest sub-agent for the leviable milk product before they receive levy payments from a lower ranked sub-agent, who is liable to remit the levy. This proposed regulation provides that:

- if the sub-agent must pay the next highest sub-agent for the product before they have received any levy payments from the next lowest sub-agent, then they must pay the levy to the next highest sub-agent on or before the 28th day of the month after they have received the levy payment from the next lowest sub-agent;

- if the sub-agent is yet to pay the next highest sub-agent for the product when they receive levy payments for that product from the next lowest sub-agent, then the sub-agent must pay the levy at the same time they pay the next highest sub-agent for the product.

Regulation 9 provides the timing for remission of the levy by the highest ranking sub-agent to the collection agent in a complex supply chain (with multiple sub-agents). It is recognised that the highest ranking sub-agent may need to pay the collection agent for the leviable milk product before they receive levy payments from the next lowest subagent, who is liable to remit the levy. This proposed regulation provides that:

- if the highest ranking sub-agent must pay the collection agent for the product before they have received any levy payments from the retailer, then they must remit the levy to the collection agent on or before the 28h day of the month after they have received the levy payment from the next lowest sub-agent;

- if the highest ranking sub-agent is yet to pay the collection agent for the product when they receive levy payments for that product from the next lowest sub-agent, then the highest ranking sub-agent must remit the levy to the collection agent at the same time they pay the collection agent for the product.

Regulation 10 prescribes the information that will be required on the form that the collection agent, sub-agent or collecting organisation must provide to inform the Secretary of Agriculture Fisheries and Forestry Australia (the Secretary) of failure by a liable party to pay the levy. The information that is required on this form is necessary to assist in the collection of the unpaid levy.

Regulation 11 provides the process by which a collection agent or collection sub-agent may be exempted from the requirement to provide a receipt for levy payment or remittance. The Secretary will only grant an exemption from the requirement to provide a receipt if the Secretary is satisfied that the levy payment or remittance can be verified by an alternative method.

Regulation 12 prescribes what information must be included on a receipt for a levy payment or remittance. The information that is required on this form is necessary to assist in the collection of the levy and the audit process.

Regulation 13 prescribes which entities must provide a return to the Commonwealth.

Regulation 14 prescribes the information that will be required on the return form that the collection agent, sub-agent or collecting organisation must provide the Secretary when payment or remittance of the levy is made to the Commonwealth. The information that is required on this form is necessary to assist in the collection of the levy and the audit process.

Regulation 15 prescribes where returns are to be lodged.

Regulation 16 prescribes when the levy is due to be lodged.

Regulation 17 provides for a person to apply for a refund of the levy, and the circumstances in which the Secretary may refund the levy. It is proposed that the levy may only be refunded if

a) the levy was applied to a product that was subsequently found to not be a

leviable milk product, for example a product that was subsequently

exported;

b) if an error was made in the calculation of the levy amount; or

c) if the levy had already been paid on a product for which a sale to a retailer

was not completed, for example where the product was found to be

defective, and the purchase cost of the product was refunded.

The proposed regulation also requires that the Secretary must provide a written explanation of why a request for refund of a levy payment has been refused.

Regulation 18 prescribes how the levy may be paid to the Commonwealth.

Regulation 19 provides for review of a decision by the Secretary or an authorised person to either refuse an exemption for a collection agent or collection sub-agent to issue a receipt, or refuse to refund a levy payment.

The proposed regulation provides that after receiving a written application for a review of a decision by an authorised person, the Secretary must review the original decision within 45 days, and provide advice to the appellant of the outcome of this review. If the appellant is not satisfied with the outcome of the Secretary's review, they may apply to Administrative Appeals Tribunal for a review of a decision by the Secretary.