GST is the destination based taxation it leads to loss for the source state.to compensate the loss of source state,union government came up with compensation scheme.by which source states given the indirect tax shortfall compared to 2016 level as a compensation.
This compensation provided for 5 years from 2017-18-2022
this compensation is given by the union government by imposing Compensation cess.
compensation to the state ended officially by 2022
but compensation cess has not came to end.
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