Towards this objective, reputed consultants AF Ferguson, commissioned by the CII to work out a strategy, have recommended reducing the present 12 to 19 different rates prevalent in the region down to just three basic rates. The suggested rates are four per cent, eight per cent and of 12 per cent to be levied on a new ABC classification of products depending upon their importance.

Apart from this, the consultants who made a presentation of their preliminary study to AP chief minister N Chandrababu Naidu recently, have also suggested a series of steps for simplification of procedures for increasing free trade and commerce within the region without affecting thecompetitiveness of the states.

However, it has also suggested a penal rate of 50 per cent for undesirable products like liquor and cigarettes apart from a general sales tax rate of eight or 12 per cent on non-scheduled goods depending on the revenue needs of the respective states.

While it recommends the retention of the rates for the top two earners for the sake of revenues for the time being, the CII sponsored study feels for a bulk of the products a move can be made towards the suggested rationalised structure.

The exchequer would have to target a higher turnover particularly for the balance products to neutralise a possible drop in revenues though the actual implications on the revenue side are yet to be discussed with the state governments, the consultants said.

Significantly, the study also suggests several steps for substantial efforts towards improving sales tax administration which includes use of IT in a big way to improve compliance, better service and collections. Some of these suggestedmethods include bar coding for verification at check posts and other points, linking corporates to revenue offices through real time networks, permission to file return in magnetic form and preparation of CD-ROM to guide dealers through the various formalities associated with sales tax.

The CII's present exercise follows similar efforts three years back when it had attempted to work out a common southern market concept, the PAAKT, which unfortunately did not find many takers. However the present effort is aimed more at fostering cooperation among the states in the region in a bid to harness the great degree of similarities and strengths of the southern states.

Apart from the uniform tax structure, the CII common agenda also touches upon a common tourism plan for the south and sharing of infrastructure between the states in the region thereby saving precious resources.

The development of a networked tourism circuit in the southern states, marketing the region as a major tourist destination and thepromotion of south India as the entry point for overseas tourists are some of the aspects of the common tourism plan suggested by the CII.

The infrastructure sharing plans includes pooling of resources for creating indivisible and shareable facilities such as inland waterways, intra-regional highways and a three-tier regional air grid among other things.