(1) The Commission shall determine and recommend to the Government of Nepal the detailed basis and framework for distribution of revenue between the Government of Nepal, provinces and local levels and between the provinces and local levels based on the following:-
(a) Population and Demographic Description,
(b) Area,
(c)   Human Development Index,
(d)  Expenditure requirement,
(e)   Efforts made in revenue collection,
(f)   Infrastructure development,
(g)  Special circumstances.
(2) The detailed basis and framework determined by the Commission in accordance with sub-section (1) shall be valid for five years and the Commission shall review it every five years and recommend to the Government of Nepal.
(3) Notwithstanding anything written in sub-section (2), the Government of Nepal may request the Commission to review the detailed basis and framework determined under sub-section (1) for the first time after the implementation of this Act for special reasons five years in advance. Request made by the Government of Nepal If deemed necessary, the Commission will review and recommend to the Government of Nepal on the detailed basis and format prescribed in accordance with sub-section (1).
(4) Notwithstanding anything written in sub-section (3), the detailed basis and framework determined for the first time in accordance with sub-section (1) cannot be reviewed more than once in five years.