Frequently Asked Questions (FAQs) for Health Security se National Security (HSNS) Cess Act, 2026 and HSNS Cess Rules, 2026

Q1. Who is required to get registered under the HSNS Cess Rules?

Ans. Every taxable person as per section 3 of the Health Security se National Security Cess Act, 2025 (hereinafter referred to as ‘the Act’) must register. An application for registration shall be made in FORM HSNS REG-01 through the ACES portal. Where machines are installed in more than one factory, separate registration shall be required for each factory.

Q2. I am an existing manufacturer of Pan Masala. By what date must I apply for registration under the new HSNS Cess Rules?

Ans. You must apply for registration immediately upon the commencement of the Act and the HSNS Cess Rules, i.e., on 1st February, 2026. Since the liability to pay cess begins from that date, you must submit the registration application in FORM HSNS REG-01 on the portal at the earliest. Your registration certificate will be effective from the date you become liable, which for existing manufacturers is 1st February, 2026.

Q3. I applied for registration, but the officer has not responded for the past ten days. Can I start manufacturing?

Ans. Yes. As per rule 5(3) of the HSNS Cess Rules, if the proper officer fails to take action within seven working days, the application is deemed to have been approved. The Registration Certificate in FORM HSNS REG-02 will be made available on the portal.

Q4. Can I pay my cess liability after applying for registration without obtaining the registration certificate?

Ans. Yes, you may pay your cess liability after obtaining the temporary registration number upon successful submission of FORM HSNS REG-01. The Act requires that the cess be collected from every taxable person at the beginning of each month, but no later than the 7th day of that month. For new applicants who already own or control machines on 1^st February, 2026, the cess payment may be done on the portal by utilizing the said temporary registration number even if the registration certificate (which shall be issued within seven working days) is still being processed.

Q5. Once I get my registration, when must I file the declaration regarding my machines?

Ans. You must file the declaration in FORM HSNS DEC-01 on the portal within seven days of the grant of your registration. This declaration must specify the parameters of your machines (maximum rated speed, weight of specified goods, etc) relevant for the computation of the cess.

Example: ‘ABC Ltd’ receive their Registration Certificate on February 10, 2026. They must file FORM HSNS DEC-01 by February 17, 2026.

Q6. What if I add a new machine? Do I need to inform the department?

Ans. Yes. You must file a fresh declaration under section 9(3) of the Act and rule 9(2) of the HSNS Cess Rules within fifteen days of any change in the parameters relevant for the computation of cess, which includes the installation or addition of a new machine.

Example: On March 1, 2026, you install a new packing machine. You must file a fresh declaration in FORM HSNS DEC-01 reflecting this change by March 16, 2026.

Q7. Can I file a fresh declaration immediately after filing the first one?

Ans. As per rule 9(2) of the HSNS Cess Rules, you cannot file a fresh declaration until the proper officer has issued an order under rule 11 with respect to your previous declaration.

Q8. How will the department verify my declaration?

Ans. The proper officer will verify your declaration within 90 days as per rule 10 of HSNS Cess Rules (Chapter III).

Q9. What happens if the officer finds that the maximum rated speed of my machine is higher than what I declared?

Ans. If a discrepancy is found affecting the computation of cess:

1. The officer will inform you of the discrepancy.
2. After giving you an opportunity to be heard, the proper officer will pass an order confirming the computation of cess within 30 days of verification.
3. You will have to pay the amount of cess so determined for the subsequent period and the past period as per rule 11(3) which mandates that you are liable to pay the differential amount of cess along with interest for the period commencing from the date of installation (for initial declarations) or the date of change in parameters (for fresh declarations) until the date of actual payment and also, pay the determined cess amount for the subsequent period.

Example: On 1^st February, a manufacturer installs a machine with a speed of 300 pouches/minute and declares its details to the Department. On 1^st April, the proper officer, after verification, concludes that the machine’s maximum rated speed is actually 700 pouches/minute. The proper officer shall issue an order by April 30th detailing the computation of cess after giving a reasonable opportunity to be heard. The registered person shall pay the differential cess amount for February, March, and April, along with interest, because the liability is backdated to the date of installation (Feb 1st) and also, pay the cess as determined for the subsequent period as per the order issued.

Q10. If the officer agrees with my declaration, will I get a confirmation?

Ans. Yes. If no discrepancy is found, the proper officer shall pass an order confirming your declaration within 15 days from the date of verification.

Q11. How is the HSNS Cess calculated? Is it based on actual production?

Ans. No. It is calculated and payable on a monthly basis based on the number of packing machines installed and their maximum packing speed, as per Table 1 of Schedule II of the Act. In case there is a wholly manual process unit, the cess payable is as per Table 2 of Schedule II of the Act.

Q12. I am installing a new machine in the middle of the month. Do I pay cess for the full month?

Ans. Yes. If you are a registered person and you add or install a new machine in the middle of a month, the cess payable for that new machine is required to be paid fully for that entire month within five days of such addition or installation.

Example: ‘M/s ABC Ltd’ (an existing registered entity) operates 4 machines. On August 20, 2026, they install a 5th Machine with a monthly cess liability of ₹ 1,01,00,000. They must pay the monthly cess of ₹ 1,01,00,000 by August 25, 2026. In case of any delay in payment, interest would be payable from August 26, 2026 to the date of actual payment.

Q13. What are the due dates for payment and return filing?

Ans. You must pay the monthly cess electronically by the 7th day of the current month. You must file the monthly return in FORM HSNS RET-01 by the 20th day of the succeeding month.

Q14. What happens if I file my return late?

Ans. If you fail to furnish the return by the due date, the proper officer will issue a notice requiring you to furnish such return within fifteen days of the receipt of the said notice. Further, as per section 18(1)(c) of the Act, failure to furnish the return on the due date shall result in the penalty of at least ₹10,000.

Q15. What happens if I make errors in my return or provide false information?

Ans. You can rectify any omission or incorrect particulars in your return before the end of the calendar month in which the original return was filed. However, if such rectification results in a higher liability of cess than declared originally, you must pay the differential amount along with interest.

Q16. What is “Abatement” under the HSNS Cess Rules?

Ans. Abatement is a form of adjustment in the cess liability of a registered person in case any machine or manual process unit remains inoperative for a continuous period of fifteen days or more. Since the cess is calculated on a monthly basis per machine, abatement ensures adjustment of already paid cess for such periods when the machine was sealed and not in use.

Q17. What is the minimum period of shutdown required to claim abatement?

Ans. You can only claim abatement if the machine or manual unit is non-operative for a continuous period of fifteen days or more. If a machine is sealed for 10 days, then desealed for two days and again sealed for another 10 days, you cannot claim abatement because the continuous period is less than 15 days.

Q18. Can I simply switch off the machine and claim abatement later?

Ans. No. You must inform the proper officer at least 3 working days before the intended closure. The proper officer will visit your factory and officially seal the machine so it cannot be operated within three days of the receipt of the intimation.

You must ensure that no manufacturing takes place on that machine during the period the machine was sealed.

Q19. Can I stop paying Cess if my machine is not working or if there is no demand?

Ans. You can claim abatement (adjustment) only if the machine is non-operative for a continuous period of 15 days or more. The procedure for claiming abatement under Chapter V of the HSNS Cess Rules should be followed.

Q20. How is the abatement amount calculated?

Ans. The abatement is calculated on a pro-rata basis using the formula given below: