Para 4 of the Presidential Order dated 2nd December, 1960
issued by the Department of Economic Affairs as modified by
that Department's letters Nos. 4(14)-B/60 dated 28.02.1961
and 13(4)-B/61 dated 21.04.1961 stated as follows:-
4. In addition to the matters on which under the provisions
of sub-clauses (a) and (b) of the clause 3 of 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 revenues 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 considerations, to:-
(i) the requirements of the Third Five Year Plan; and
(ii) the efforts to be made by those States to raise
additional revenues from the sources available to them;
(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 manner in which the sums of Rs. 12.5 crores, which
the Railway have agreed to pay to the General Revenues every
year consequent on the decision taken to merge the tax on
Railway Fares with the passenger fares and repeal the Railway
Passenger Fares Act, 1957 , should be distributed amongst
the States;
(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) rayon or artificial silk fabrics
(iii) silk fabrics
(iv) woollen fabrics
(v) sugar, and
(vi) tobacco, including manufactured tobacco, in replacement
of the sales taxes formerly levied by the State Governments."
TERMS OF REFERENCE
OF THE THIRD FINANCE COMMISSION