Registration under HSNS Cess Rules
Every taxable person under section 3 of the Act must register using FORM HSNS REG-01 via the ACES portal. Factories with multiple machines require separate registrations per factory. Existing manufacturers must apply immediately from 1st February, 2026, as cess liability begins from this date. Temporary registration allows cess payment while the certificate is processed.
Declarations and Machine Verification
After registration, a declaration in FORM HSNS DEC-01 must be filed within seven days, specifying machine parameters for cess computation. Any addition or change of machines must be reported within 15 days. Physical verification is carried out within 90 days, and discrepancies in machine specifications may result in adjusted cess and interest for past and subsequent periods.
Cess Payment & Calculation
HSNS Cess is calculated monthly based on machine count and maximum rated speed, or on a pro-rata basis for new units or partial months. Manual process units have separate slabs. Payment is due by the 7th of each month, with monthly returns in FORM HSNS RET-01 due by the 20th of the following month. Late filing can attract penalties starting at ₹10,000.
Abatement and Machine Shutdowns
Abatement is allowed when machines remain inoperative for 15 continuous days or more. Claims require prior intimation and official sealing by the proper officer. The abatement is computed pro-rata using the formula A = C × D / N, where C is monthly cess, D is days inoperative, and N is total days in the month. Abatement is adjusted against future cess liabilities rather than refunded as cash.
Machine Operations and Compliance
Machines must be operated according to declared maximum speed, irrespective of actual production. CCTV surveillance covering all units is mandatory, with footage preserved for 24 months. Removal or scrapping of machines requires prior intimation and officer supervision. Any changes trigger fresh declarations and verification within 90 days.
Key Takeaways for Manufacturers
- Register promptly on ACES portal using FORM HSNS REG-01.
- File machine declarations (FORM HSNS DEC-01) within seven days of registration.
- Pay monthly cess by the 7th and file returns by the 20th of the following month.
- Abatement is allowed only for continuous shutdowns of 15 days or more.
- All declarations are subject to verification, and discrepancies must be rectified promptly.
