Venue: Hotel Radisson Blu, Udaipur, Rajasthan

Summary of Points Finalized in the Meeting

Approval of Draft Compensation Law

The Council approved the Draft GST (Compensation to States) Law, as modified based on the decisions of the GST Council and vetted by the Ministry of Law & Justice.

Major updates included corrections to definitions (e.g., “Compensation,” “Projected Growth Rate”), insertion of provisions on calculation and release of compensation, clarification that compensation would be payable for a transition period of five years, and creation of a non-lapsable Compensation Fund in the public account of India.

It was agreed that if the Fund had unutilized balance after the transition period, 50% would go to the Centre and 50% to States, distributed in proportion to their State GST revenues.

The Council also decided that cess would apply on the full value chain (not single-point) for items like tobacco and aerated drinks.
10th GST Council Meeting Minutes, pages 11–16

Clarifications and Decisions on Cross-Empowerment

The Council reaffirmed cross-empowerment arrangements between the Centre and States under CGST and SGST for enforcement and administration.

Agreed on replacement of specific paragraphs of earlier minutes to refine clarity on administrative control, distribution ratios, and flexibility among States.

The decision ensured States would have control over 90% of taxpayers with turnover below ₹1.5 crore and Centre over 10%, while above ₹1.5 crore would be divided 50:50.
10th GST Council Meeting Minutes, pages 2–10

Distribution of New Registrants

New taxpayers entering the GST network would be divided 50:50 between Centre and States initially.

Based on actual turnover at the end of the financial year, the division would shift to 90:10 (below ₹1.5 crore) or 50:50 (above ₹1.5 crore).
10th GST Council Meeting Minutes, page 6

Decision on IGST Administration and Jurisdiction

It was decided that States would be cross-empowered to administer IGST similar to CGST and SGST, either under law or Article 258 of the Constitution.

However, the Centre alone would handle issues related to “place of supply,” import/export adjudication, and customs-related matters.

Issues relating to export/import refund verification would be further examined by the Law Committee before final decision.
10th GST Council Meeting Minutes, pages 7–9

 Changes in Compensation Fund Management

Section 10(1) of the Compensation Law was amended to replace the term “revenues” with “amounts”, to allow inclusion of funds raised through borrowing or other sources.

The Council confirmed that the Compensation Fund would form part of the Public Account of India, not subject to parliamentary appropriation.
10th GST Council Meeting Minutes, page 14

Approval of Provisions in the Model GST Law

The Council approved specific sections of the Model GST Law vetted by the Ministry of Law.

Key decisions:

Members of the Appellate Tribunal: qualification relaxed to include officers with finance/tax knowledge.

Retirement age of Technical Members increased to 65 years.

Retired officers can be appointed as Technical Members.

Appointment of Judicial Members and Presidents of Tribunals to be done in consultation with Chief Justices of the Supreme Court and High Courts.
10th GST Council Meeting Minutes, pages 17–19

Next Steps and Implementation Plan

The Compensation Law to be presented to Parliament in March 2017 session after Cabinet approval.

The Model GST Law to be reviewed further by the Law Committee before final presentation to the Council.
10th GST Council Meeting Minutes, page 16
In summary:
The 10th GST Council Meeting (18 February 2017) finalized the Compensation to States Law, refined cross-empowerment and administrative control arrangements, and approved key legal provisions of the Model GST Law. The meeting solidified foundational structures for GST implementation, including tribunal framework, compensation mechanism, and administrative coordination between the Centre and States.