The scaling of microchip technologies has enabled large scale and very complex systems-on-chip (SoC). The highperformance, flexible, scalable, simple to design and power efficient interconnection network, called the Network-on-chip (NoC), permits the system components to communicate effectively. This communication structure needs to be tested for correctness, which requires handling huge volume of test data. Thus, test data compression has now become essential to reduce test costs. It reduces test data volume which in turn decreases testing time. This work presents a new test data compression method based on binary difference and the corresponding decompression architecture. The major advantages of this compression technique include very high compression ratio, and a low-cost on-chip decoder. The effectiveness of the proposed approach is demonstrated by applying it to the full scan test data set of ISCAS'89 benchmark circuits.