Solution:The distribution and determination of the net proceeds of taxes, tolls, and fees between the state and local bodies• The State Finance Commission is set up to govern the distribution between the State and the Local Bodiesof the net proceeds of the taxes, duties, tolls, and fees leviable by the State.
• It is divided between them and the allocation between the local bodies at all levels of their respective shares of such proceeds.
• It also looks after the determination of the taxes, duties, tolls, and fees which may be assigned to, or appropriated by, the Panchayati Raj Institutions and Uran Local Bodies.