Distribution and allocation of revenues.

(1) The Governor shall, on the basis of recommendation of the Finance Commission- (i) distiribute between the State Government and the Municipalities the net proceeds of the taxes, duties, tolls and fees which the State levy and collect ; and (ii) allocate between the Municipalities their respective shares of such proceeds. (2) While distributing or allocating shares of such proceeds to a Municipality the Governor shall take into consideration the gross sum collected in the Municipality area, the cost of collection and the municipal obligations and the performance of the Municipality.