GST compensation mechanism ensures state revenue protection via a Compensation Cess funding entitlement calculations during transition. Defines the compensation scheme mechanics for State revenue protection on GST implementation: specifies transition date and five-year transition period, establishes base year, base year revenue, projected growth rate and projected revenue for entitlement calculation, and designates the Goods and Services Tax Compensation Cess as the funding levy. Cross-references Central and Integrated GST Acts for undefined terms and defines input tax/input tax credit in relation to the Compensation Cess.