A coaxial perforating charge includes a shaped charge and a container having a fracture explosive pack inside. The container is coaxially provided at a front end of the shaped charge; the fracture explosive pack is a ring-shaped explosive pack formed by impregnating a fracture explosive for eliminating a compacted zone into the container; the fracture explosive pack is coaxially arranged with the shaped charge. The fracture explosive includes ammonium perchlorate, aluminum powder, additive, and dioctyl sebacate; the additive is hydroxyl-terminated polybutadiene (HTPB), or a mixture of HTPB, N,N′-diphenyl-p-phenylenediamine and toluene di-isocyanate. A perforation method thereof, for self-eliminating a compacted zone, includes steps of: running a jet perforating gun downward; perforating while self-eliminating a compacted zone. The charge and its perforation method are reasonably designed, convenient, safe, reliable, well performed, and able to perforate while self-eliminating the compacted zone, which effectively eliminates an impact on rock permeability of the compacted zone.