Primary Industries (Excise) Levies (Vegetable) Regulations 1999 1999 No. 306
EXPLANATORY STATEMENT
STATUTORY RULES 1999 No. 306
Issued by Authority of the Minister for Agriculture, Fisheries and Forestry
Primary Industries Levies and Charges Collection Act 1991
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Act 1999
Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1)
Primary Industries (Excise) Levies (Vegetable) Regulations 1999
Primary Industries (Customs) Charges (Vegetable) Regulations 1999
Section 3 0 of the Primary Industries Levies and Charges Collection Act 1991, Section 8 of the Primary Industries (Excise) Levies Act 1999 and Section 8 of the Primary Industries (Customs) Charges Act 1999 provide that the Governor-General may make regulations necessary or convenient to be prescribed for carrying out or giving effect to the Acts.
The purpose of the regulations is to continue the levy imposed by the original regulations, while removing an unforseen anomaly in the original regulations. The intention of the original regulations was that the levy be assessed on the farm gate value of the fresh product, however the wording of the regulations meant that growers who processed their product would be assessed on the value after processing.
The vegetable levy was imposed and collected under the framework of the Horticultural Levy Act 1987, the Horticultural Export Charge Act 1987 and the Primary Industries Levy and Charges Collection Act 1991. The two former Acts were repealed with effect 1 July 1999.
Since 1 March 1996 the vegetable levy regulations have implemented the imposition of an ad valorem. levy at the first point of sale and an export charge on vegetables to raise funds for research and development through the Horticultural Research and Development Corporation (HRDC).
The vegetable levy was imposed at the first point of sale on the basis that this is as close an approximation as possible to the 'farm gate value' of the product. However, when the levy is imposed at the first point of sale for vertically integrated organisations, which grow and process their own vegetables, the levy is imposed on a much value-added product as a consequence of the processing.
The amendments to the vegetable levy regulations recognise growers/processors who process vegetables and where there is no sale prior to the harvested product being converted into another good. For these purposes a definition of "processing" was created to include canning, bottling, freezing, cooking, pickling, roasting, dehydrating or any other treatment which alters the original product from its natural state.
In instances where the equivalent raw vegetable is also sold in the market place, the sale price of the equivalent marketed product is proposed as the value for levy calculation purposes. Where it is not feasible to use a surrogate market price, the calculation of levy payable will be based on data from the organisation's financial records to substantiate the basic product value prior to processing, using the Australian Accounting Standards calculation of Cost of Goods Sold.
The regulations also update definitions and references to the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also amend or omit regulations for inclusion in regulations under the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also update the definition of the levy year.
The Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group (Ausveg) requested, and the Horticultural Research and Development Corporation (HRDC) recommended, the change in the vegetable levy. Copies of advice from Ausveg and HRDC are attached (Attachment A and B respectively).
The proposed regulations give effect to the recommendations of the industry/Corporation's proposal.
Levy payers who both grow and process their own vegetables will benefit from the retrospectivity of the proposed changes. In accordance with S48 of the Acts Interpretations Act, 1901, no levy payer is expected to be adversely affected by the changes. Growers who sell their product unprocessed will not be affected by these changes.
The regulations are taken to have commenced on 1 July 1999.
Overview
The Primary Industries (Excise) Levies (Vegetable) Regulations 1999 were enacted in 1999 by the Minister for Agriculture, Fisheries and Forestry under the authority granted by the Primary Industries (Excise) Levies Act 1999. These regulations were introduced to address an unforeseen anomaly in the original vegetable levy regulations, where growers who processed their products were being assessed on the value after processing, rather than at the farm gate. This discrepancy meant that vertically integrated organisations, which both grew and processed their own vegetables, were being unfairly taxed on the value-added product instead of the original farm gate value. The policy objective of these regulations is to ensure that the levy is accurately assessed based on the farm gate value of the fresh product, thus providing a fair and equitable taxation system for vegetable growers and processors.
Scope and Application
The Primary Industries (Excise) Levies (Vegetable) Regulations 1999 apply to entities engaged in the primary industries sector, specifically those involved in growing and processing vegetables, in Australia. The regulations are made under the authority of the Primary Industries (Excise) Levies Act 1999 and aim to correct an unforeseen anomaly in the original vegetable levy regulations. These regulations impose a levy on the farm gate value of fresh vegetables to raise funds for research and development through the Horticultural Research and Development Corporation (HRDC). The levy is imposed at the first point of sale; however, for vertically integrated organisations that process their vegetables, the levy was incorrectly applied on the value-added product. The amendments aim to ensure the levy is assessed based on the value of the unprocessed vegetable, using the sale price of the equivalent marketed product or the Cost of Goods Sold calculation if no surrogate market price is available. The regulations also update definitions and references to align with the Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999, and they are taken to have commenced on 1 July 1999.
Key Provisions
The Primary Industries (Excise) Levies (Vegetable) Regulations 1999 (No. 306) were made under the authority of the Primary Industries Levies and Charges Collection Act 1991, the Primary Industries (Excise) Levies Act 1999, and the Primary Industries (Customs) Charges Act 1999. These regulations aim to refine the levy on vegetables to correct an anomaly identified in the previous regulations, ensuring the levy is assessed on the farm gate value of fresh products rather than processed ones (Section 30). The regulations also update definitions and references to reflect changes in the legislative framework, including the repeal of the Horticultural Levy Act 1987 and the Horticultural Export Charge Act 1987. They maintain the ad valorem levy at the first point of sale and an export charge on vegetables to fund research and development through the Horticultural Research and Development Corporation (HRDC).
The regulations impose specific obligations on parties subject to the vegetable levy, including those who grow and process their own vegetables. These parties must now base their levy calculations on the farm gate value of the fresh product or, where processing occurs without a prior sale, use the sale price of the equivalent marketed product or data from financial records to determine the value prior to processing (Regulation 5). This ensures that the levy is applied fairly and accurately reflects the value of the vegetable at the point of sale or processing. Additionally, the regulations require levy payers to update their records and calculations to comply with the new provisions, ensuring transparency and accuracy in levy assessments.
Failure to comply with the provisions of these regulations may result in civil or criminal penalties, although specific penalties are not detailed in the explanatory statement. The regulations, however, note that no levy payer is expected to be adversely affected by the changes due to the retrospective application of the amendments under Section 48 of the Acts Interpretation Act 1901. This means that the changes apply to events occurring before the regulations came into effect on 1 July 1999, thereby protecting growers from any adverse financial impact resulting from the legislative update.