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Starting on February 1, 2026, the existing GST compensation cess on these “sin goods” will be replaced by a new regime featuring additional excise duties and specialized health cess.

Good News: New Excise Duties And Health Cess To Take Effect February 1, 2026

Notifications

The government has replaced the current cess rate with "Nil" for many ranges of serial numbers in the schedule covering certain entries between S. No. 1 and S. No. 38.

Government Announces Nil Compensation Cess Rate Across Various Tobacco Products From Feb 1

News

The Finance Ministry firmly denies claims that the Centre misused Compensation Cess, clarifying it was collected only for states and for repaying GST Council-approved COVID-related borrowings.

False Accusation Exposed: Centre Did Not Use Compensation Cess for Its Own Debt

The Federation of Automobile Dealers Association (FADA) has approached the Supreme Court seeking relief over the lapse of Rs. 2,500 crore compensation cess credits under the new GST 2.0 framework.

FADA Approaches Supreme Court Seeking Protection Over Rs. 2,500 Crore Cess Credits Lapse Amid GST 2.0 Transition

The GST compensation cess is being removed from September 22, 2025, with the start of a new GST regime in India.

Government Scraps Compensation Cess Effective from Sept 22, 2025 [Read Notification]

The removal of GST compensation cess lowers prices for consumers but leaves businesses grappling with unused credits, old stock, and compliance costs.

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Good News: New Excise Duties And Health Cess To Take Effect February 1, 2026

Government Announces Nil Compensation Cess Rate Across Various Tobacco Products From Feb 1

False Accusation Exposed: Centre Did Not Use Compensation Cess for Its Own Debt

FADA Approaches Supreme Court Seeking Protection Over Rs. 2,500 Crore Cess Credits Lapse Amid GST 2.0 Transition

Government Scraps Compensation Cess Effective from Sept 22, 2025 [Read Notification]

GST 2.0: Compensation Cess Removed on Most Goods, Sin Goods Still Under High Tax Net