The Central Government has notified the Health Security Se National Security Cess Rules, 2026, providing a comprehensive procedural framework for the levy and administration of the cess introduced under the Health Security Se National Security Cess Act, 2025.
The rules were published in the Gazette of India (Extraordinary) on 1 January 2026 and will come into force from 1 February 2026.
Key Highlights of the Rules
Online Registration Made Mandatory
All liable taxable persons must apply for registration electronically on the CBIC portal (cbic-gst.gov.in) using Form HSNS REG-01. Separate registrations are required for each factory where specified machines are installed.
A temporary registration number will be generated immediately to enable cess payment until the final registration certificate (Form HSNS REG-02) is issued.
Declaration & Verification Requirements
Registered persons must file a declaration in Form HSNS DEC-01 within 7 days of registration, disclosing machine details and parameters relevant for cess computation.
Any change in machine capacity, parameters, or installation of new machines must be declared within 15 days. Declarations will be verified through:
- Physical inspection of the factory
- Technical verification of machine capacity
- Third-party expert assessment, if required
Monthly Cess Payment & Returns
- Monthly cess must be paid electronically by the 7th of the following month
- Monthly returns are required to be filed in Form HSNS RET-01 by 20th of the next month
- Delayed payments attract interest under Section 17 of the Act
Cess is calculated on the basis of maximum machine capacity, irrespective of actual operating speed.
Abatement for Non-Operation of Machines
Where machines remain sealed and non-operational for 15 days or more, registered persons may claim abatement of cess subject to prescribed conditions and prior intimation to authorities.
Detailed formulas and illustrations have been provided in the rules for accurate computation of abatement amounts.
Audit, Records & Compliance
- Audit may be conducted for one or more financial years
- Registered persons must maintain extensive records, including machine invoices, electricity bills, production records, stock details, and financial statements
- Records must be preserved for 24 months after the end of the relevant financial year
Compounding of Offences
The rules prescribe detailed procedures and compounding amounts for various offences, including cess evasion, wrongful refunds, and non-compliance, subject to payment of due cess, interest, and penalty.
Effective Date
Rules applicable from: 1 February 2026
Why This Matters
The notification brings clarity, transparency, and procedural certainty to the administration of the Health Security to National Security Cess, ensuring uniform compliance, digital monitoring, and structured enforcement.
Manufacturers and affected entities are advised to review registration status, machine details, and internal compliance systems well before the effective date.
Official copy of the notification has been attached
CAclubindia
