The Ministry of Finance has published detailed Frequently Asked Questions (FAQs) outlining key compliance requirements under the newly framed Health Security and National Security (HSNS) Cess Act, 2026, and the associated HSNS Cess Rules, 2026.
The FAQs aim to help manufacturers, taxable persons, and industry stakeholders understand registration, cess payment, declaration and compliance processes under the new legal framework, which comes into effect from 1 February 2026.
Who Must Register Under HSNS Cess Rules?
Under the Act, every taxable person liable for the HSNS Cess must apply for registration in FORM HSNS REG-01 on the ACES portal. If machinery is installed in multiple locations, separate registrations are required for each factory.
Registration Deadlines and Process
Existing manufacturers of pan masala and other taxable products must register immediately upon the Act's commencement on 1 February 2026. Liability to pay cess also begins from this date.
If the proper officer fails to act within seven working days, the application is considered deemed approved, and a registration certificate will be issued through the portal.
Payment and Returns
Registered persons may pay cess immediately after registration using the temporary registration number, even if the final certificate is pending. Cess must be collected at the beginning of each month, but not later than the 7th day of the month.
Monthly returns must be filed in FORM HSNS RET-01 by the 20th day of the succeeding month. Late submission could attract penalties.
Machine Declaration Requirements
Within seven days of registration, manufacturers must file FORM HSNS DEC-01, detailing key machine parameters such as maximum rated speed and weight of goods for cess computation.
If a machine is installed after registration, a fresh declaration must be submitted within 15 days, and the department will verify the declaration within 90 days.
Abatement and Cess Calculation
The FAQs clarify that abatement - partial adjustment of cess - may be claimed if a machine remains non-operative for 15 continuous days or more. The cess is generally payable for the full month, including cases where machines are installed mid-month, with provisions specifying how liability is computed.
Enforcement and Compliance
Industry participants should be aware that discrepancies in declarations may be reviewed by the proper officer, who can issue orders within specified timeframes to confirm cess liability, including interest on differential amounts where applicable.
The FAQs provide clarity on numerous procedural points and are an essential reference for tax practitioners, manufacturers and compliance teams ahead of the HSNS Cess regime's launch.
Official copy of the Press Release has been attached
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