Why is there a dairy produce levy?
The Australian Government introduces levies and export charges at the request of industry. These levies variously fund research and development, marketing, residue testing, plant and animal biosecurity programs and emergency responses for industry.
The dairy produce levy (milk delivered to a manufacturer) funds Dairy Australia research and development (R&D) and marketing and Animal Health Australia (AHA) programs. To find out more, visit Dairy Australia and Animal Health Australia.
What is the levy payable on?
Levy is payable on relevant dairy produce - that is, whole milk or whole milk products - delivered by a producer to a manufacturer or produced and used by a manufacturer in the manufacturing of dairy produce.
Who pays the levy and who submits returns?
The producer (a manufacturer of or a person who produces, relevant dairy produce) is liable to pay the levy.
Where a producer sells their produce via an intermediary, such as a first purchaser, buying agent or selling agent; the intermediary is liable to pay levy and submit all return forms to the Department of Agriculture and Water Resources – Levies on behalf of the producer. The intermediary can recover the amount of levy paid from the producer, by offset or otherwise.
If the producer processes and uses their own whole milk commercially (e.g. on farm cheese making etc) they must pay levy and submit all return forms directly to the Department of Agriculture and Water Resources - Levies as the milk is processed.
Download a return form or contact your Department of Agriculture and Water Resources – Levies state office.
Are there any exemptions associated with this levy?
No exemptions from paying levy currently apply in relation to the Dairy Produce Levy.
What is the rate for the dairy produce levy?
The rate for the Dairy Produce Levy is calculated as follows:
Milk Fat: 2.9263 cents per kilogram (litreage X milk fat% = kgs of milk fat)
Protein: 7.1299 cents per kilogram (litreage X protein% = kgs of protein)
The sum of levy payable for the milk fat and protein rate components is the total levy payable on Dairy Produce.
Australian Government levies exclude Goods and Services Tax (GST).
When is the payment due?
The return together with payment must be submitted to the Department of Agriculture and Water Resources - Levies within 1 month and 28 days after the end of the month in which delivery/use took place. For example the return with payment for the month of July is due on or before 28 September.
Annual Dairy Producer Information Return:
The annual information return is due on or before 28th July. For example the return for the 2016-17 levy year is due on or before 28 July 2017.
Note: The annual information return is an information return only and relates to shareholder entitlements of Dairy Australia.
General information and definitions
The levy rate is calculated per kilogram of milk fat and protein. When test results are not available then default rates apply i.e. the milk fat rate is currently taken to be 3.2% and the protein content is taken to be 3.0%.
The producer is the person who produces or manufactures whole milk or whole milk products.
A levy year is the same as a financial year (i.e. 1st July to 30th June).
A return must be in the form of a declaration that the information given is correct in every material particular.
The annual dairy producer information return must set out:
- Producer name (legal name attributed to the ABN)
- Australian Business Number (if a producer has an ABN)
- Business/residential address (cannot be a post office box or a post office bag)
- Postal address (if a producer has a post office box or a post office bag)
- Contact information including the phone, mobile, fax and email address
- Amount of levy paid by the producer in the financial year
- Quantity of milk on which levy was paid
- Milk fat content on which levy was paid
- Protein content on which levy was paid
You may provide information about producers on the reverse of the return or electronically.
- Microsoft Excel spread sheet
- Any type of CSV file format
- Microsoft Word document
Contact your Department of Agriculture and Water Resources – Levies state office for more information or to make arrangements to supply this information.
What legislation covers this levy?
A legislative framework of imposition, collection and disbursement legislation authorises and supports Australia’s primary industries levies system. These are the relevant Acts:
Primary Industries Levies and Charges Collection Act 1991
Primary Industries (Excise) Levies Act 1999
Please note that, under section 27 of the Primary Industries Levies and Charges Collection Act 1991 (PILCC Act 1991) an authorised Department of Agriculture and Water Resources officer can release the names and addresses of levy payers to industry bodies and levy recipient organisations.
Download the legislation from Comlaw or call Canprint Information Services on 02 6293 8383 to purchase a copy.
This information sheet is a guide only and does not substitute for the relevant legislation.