Venue: Vigyan Bhavan, New Delhi

Summary of Points Finalized in the Meeting

Finalization of the Draft Model GST Law

The Council discussed and approved the revised draft of the Model GST Law after incorporating comments from States and the Ministry of Law & Justice.

Key provisions discussed included:

Definition of “supply” and its inclusion of barter, exchange, and transfer.

Composition scheme: Limit for eligibility kept at ₹50 lakh annual turnover, subject to future review.

Time of supply: Provisions aligned to ensure consistency between goods and services.

Registration: Compulsory registration for inter-State suppliers, voluntary registration allowed.

Input tax credit (ITC): Restrictions on availing ITC for motor vehicles, personal consumption, and exempt supplies.

The Council authorised the Law Committee to make final editorial corrections and circulate the approved draft to States for review before submission to Parliament.
7th GST Council Meeting Minutes, pages 4–10

Discussion on the Draft IGST Law

The Council took note of the draft Integrated GST (IGST) Law, which governs inter-State transactions.

It was decided that the Law Committee would revise certain provisions — particularly definition of “location of supplier,” “place of supply,” and cross-empowerment — and submit the updated draft at the next Council meeting.
7th GST Council Meeting Minutes, pages 11–12

Draft Compensation Law

The Council discussed the Compensation to States Law based on the agreed formula for revenue protection.

It was decided that States would be compensated for five years for any revenue loss arising from GST implementation, using a compensation cess on select goods (tobacco, pan masala, aerated drinks, luxury cars, etc.).

The compensation would be based on 14% projected annual growth over 2015–16 revenue as the base year.

The draft law was referred back to the Law Committee for legal vetting and re-submission.
7th GST Council Meeting Minutes, pages 13–14

Cross-Empowerment and Single Interface for Taxpayers

The Council deliberated on mechanisms to ensure a “single interface” for taxpayers and to avoid dual control.

Both Centre and States agreed in principle on cross-empowerment—allowing one authority to assess, audit, and enforce provisions for both CGST and SGST.

Final modalities for sharing administrative control were deferred to the next meeting.
7th GST Council Meeting Minutes, page 15

GST on Petroleum and Alcohol

The Council reaffirmed that petroleum products would be kept outside GST initially, to be included later based on Council recommendation.

Alcohol for human consumption would remain outside the purview of GST.
7th GST Council Meeting Minutes, page 16

Exemption and Threshold Limit Discussions

The Council noted that the threshold exemption limit for GST registration would remain at ₹20 lakh (₹10 lakh for special category States).

States were asked to identify exemption lists for reconsideration once the rate structure is finalised.
7th GST Council Meeting Minutes, pages 17–18

GST Compensation Fund Structure

It was decided that the Compensation Fund would be created under the Public Account of India, and proceeds from the cess would be credited to this Fund.

Any unutilised balance after the compensation period would be distributed equally between Centre and States.
7th GST Council Meeting Minutes, page 19

Way Forward

The Council agreed to hold the next meeting in January 2017 to:

Finalise the IGST and Compensation Laws.

Resolve cross-empowerment and administrative control matters.
7th GST Council Meeting Minutes, page 21

 In summary:
The 7th GST Council Meeting (22–23 December 2016) finalised the Model GST Law, approved the framework for Compensation to States, and progressed on cross-empowerment and single interface mechanisms. It laid down the legislative groundwork for CGST, SGST, and IGST Acts while maintaining consensus on compensation and inclusion principles.