While the Centre had assured to compensate states in case GST collections did not grow 14% annually, the compensation requirement has shot up to an estimated Rs 3 lakh crore this year due to Covid-19. With a projected deficit of Rs 2.3 lakh crore, the Centre has come up with two options, involving market borrowings, to bridge the gap with repayment funded through the compensation cess.

from Times of India https://timesofindia.indiatimes.com/business/india-business/gst-compensation-cess-to-stay-beyond-june-2022-to-help-states/articleshow/78504229.cms