New Delhi [India], January 2 : The Ministry of Finance on Friday released a comprehensive set of Frequently Asked Questions (FAQs) clarifying the implementation of the Health Security se National Security (HSNS) Cess Act, 2026, and the accompanying HSNS Cess Rules, 2026, which will come into force from February 1.
According to the FAQs clarification, all taxable persons covered under the Act, including manufacturers of specified goods such as pan masala, are required to register under the new regime through the ACES portal.
"The cess will be levied on a monthly basis and calculated based on the number of packing machines installed and their maximum rated speed, rather than actual production," said FAQs released by the Ministry of Finance.
Manufacturers adding new machines mid-month will be required to pay the full monthly cess for those machines, while new units starting operations during the month will be charged on a pro rata basis.
Registration applications must be filed in Form HSNS REG-01, and separate registrations will be required for each factory where machines are installed, according to the Ministry of Finance.
The FAQs state that existing manufacturers must apply for registration immediately upon the Act's commencement on February 1, 2026. In cases where tax officers do not respond within seven working days, registrations will be deemed approved, allowing manufacturers to continue operations without disruption.
The Ministry further outlined provisions for abatement, allowing manufacturers to claim adjustment of cess if machines remain non-operational for a continuous period of 15 days or more, subject to prior intimation and official sealing of machines by authorities.
In addition, mandatory surveillance measures have been introduced, requiring factories to install CCTV systems covering all machines and manual units, with footage to be preserved for 24 months and shared with authorities on request.
The Union Government has notified the Health Security and National Security Cess Rules, 2026, which provide the legal framework for the levy, collection, assessment, and administration of the cess introduced under the Finance Act, 2025.
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