Para 4 of the Presidential Order dated 5th May, 1964 stated
as follows:
4. In addition to the matters on which, under the provisions
of sub-clauses (a) and (b) of clause (3) of the article 280
of the Constitution, the Commission is required to make recommendations,
the Commission should also make recommendations in regard
to:-
(a) the States which are in need of assistance by way of
grants-in-aid of their revenue under article 275, and the
sums to be paid to those States other than the sums specified
in the provisos to clause (1) of that article, having regard,
among other consideration to:-
(i) the revenues resources of those States for the five
years ending with the financial year 1970-71 on the basis
of the levels of taxation likely to be reached in financial
year 1965-66;
(ii) the requirements of those States to meet the committed
expenditure on maintenance and upkeep of plan schemes
completed during the Third Plan;
(iii) and further expenditure likely to devolve upon
those States for the servicing of their debt;
(iv) creation of a fund out of the excess, if any, over
a limit to be specified by the Commission of the net proceeds
of estate duty on property other than agricultural land
accruing to a State in any financial year, for the repayment
of the State's debt to the Central Government; and
(v) the scope for economy consistent with efficiency,
which may be effected by the States in their administrative
expenditure;
(b) the changes, if any, to be made in the principles governing
the distribution amongst the States under article 269 of
the net proceeds in any financial year of estate duty in
respect of property other than agricultural land;
(c) the changes, if any, to be made in the principles governing
the distribution amongst the States of the grant to be made
available to the States in lieu of taxes on railway fares;
(d) the changes, if any, to be made in the principles governing
the distribution of the net proceeds in any financial year
of the additional excise duties levied on each of the following
commodities, namely:-
(i) cotton fabrics
(ii) silk fabrics
(iii) rayon or artificial silk fabrics
(iv) woolen fabrics
(v) sugar, and
(vi) tobacco (including manufactured tobacco)
in replacement in the States' sales taxes formerly levied
by the State Governments.
Provided that the share accruing to each State shall not
be less than the revenue realised from the levy of the sales
tax for the financial year 1956-57 in the State;
(e) the effect of the combined incidence of a State's sales
tax and Union duties of excise on the production, consumption
or export of commodities or products, the duties on which
are shareable with the States, and the adjustments, if any,
to be made in the State's share of Union excise duties if
there is any increase in the States sales tax on such commodities
or products over a limit to be specified by the Commission."
TERMS OF REFERENCE
OF THE FOURTH FINANCE COMMISSION