Constitution of Finance Commission

(1) The Finance Commission referred to in Article 243-I of the Constitution, shall review the financial position of the municipalities and make recommendations to the Governor as to- (a) the principles which should govern,- (i) the distribution between the Government and the municipalities of the net proceeds of taxes, duties, tolls and fees leviable by the Government and which are to be apportioned between the municipality and the Government; (ii) the determination of the taxes, duties, tolls and fees which may be assigned to or appropriated by the municipality; (iii) the grants-in-aid to the municipality from the Consolidated Fund of the State; (b) the measures needed to improve the financial position of the municipality; (c) any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the municipalities. (2) The Governor shall cause every recommendation made by the Finance Commission, under this section together with an explanatory memorandum as to the action taken thereon to be laid before the Tamil Nadu Legislative Assembly.