ORIGIN BASIS OF TAXATION

The earlier regime was based on collection of taxes by the State in which the Sale originates. For instance, tax on sale of raw hides by a dealer in Tamilnadu to a buyer located in another state is collected in Tamilnadu at 4%. 

Thus inter state sale tax is collected not by the State where the commodity is consumed, but by the originating state.

Of course, where the sale and purchase, both take place within Tamilnadu, the tax (@ 4% at last purchase point) is levied by the same State.