What is Toll-Tax?

Toll Tax or Toll is the charge that vehicle drivers have to pay while crossing certain interstate expressways, tunnels, bridges, and other national and state highways. These roads are termed toll roads and are under the control of the National Highway Authority of India (NHAI). The counters to collect the toll tax are toll booths as well as toll plazas (which consist of several booths).

Two toll booths are located, usually at a distance of 60 kilometers, where one stretch of a toll road ends and the other begins. A toll road stretch is common of sixty kilometers or less and the toll tax is calculated accordingly. If the stretch is less than 60 km., then the toll tax value depends on the exact distance.

Features of Toll Tax

Toll tax is one of the many taxes levied by the government. They charge the money from the drivers passing by these roads as maintenance fees. Below are the salient features of toll tax in India:

  • Toll tax is a type of indirect tax (levied on goods & services). Hence, it is not charged to the individuals (their income, capital gains, revenue, etc.)
  • Toll tax is used for road construction and maintenance purposes. Therefore, it covers the costs of newly built toll roads by charging the toll tax. It also charges for maintaining the toll roads
  • Toll tax is not the usual road tax that the RTO charges from vehicle owners. But, it is the NHAI that charges these taxes for the roads under it. Also, the NHAI levies the fee only on the four-wheeler or larger vehicle passers-by of the toll roads
  • The toll tax generates the revenue which the NHAI distributes to several private parties/contractors. So, the latter is responsible for the maintaining of one particular stretch of roads or as usually called – ‘one project of toll road’
  • Toll tax collection happens at a toll booth or a toll plaza that provides a receipt of the payment. The private parties maintaining the toll plaza are also responsible for the provision of water facilities, toilets, and emergency services in case of accidents or fire
  • The toll tax decreases with time. Initially, the toll tax is to cover the costs of a newly built road/highway. Then, there is a reduced rate of 40% in the toll tax. This is because it is the maintenance charge for those roads after covering the costs

Toll Tax Calculation

Toll tax rates vary for different vehicles according to the size and the carriage weight of the vehicles. It also considers the purpose (personal or commercial) of the vehicle. The toll tax calculation depends on the following factors:

  • For toll tax rates, the NHAI takes into account the damage to the road by heavy vehicles. The load that they carry like those of buses or trucks also matter
  • In addition to the load capacity, the size of the vehicle also determines the PCU (Passenger Car Unit) upon which the toll tax is calculated
  • Because of the reasons mentioned in the above two points, there is no toll tax charge for pedestrians or two-wheeler owners. As per the rules of the Government of India, vehicles with a capacity of less than one PCU (Passenger Car Unit) are exempted from paying toll tax. Bikes or two-wheeler vehicles are equivalent to the same. Hence, they are exempted
  • Four-wheelers like cars, trucks, buses, etc. have more PCUs. They are also heavy, carry more load and do more damage to the roads. Hence, the NHAI levies the toll tax on them. Buses or trucks have 3-4 PCUs whereas trailers have about 6 PCUs

Tax Collection through FASTags

Electronic Toll Collection is a new and effective way of toll tax collection. So, the Government of India has introduced FASTags. FASTags use RFID (Radio Frequency Identification) technology for cashless toll tax payments. Therefore, there is an automatic deduction from the bank account of the individual as the vehicle approaches. Moreover, FASTags are now mandatory for all four-wheeled vehicles. 23 National banks, governed by NPCI (National Payments Corporation of India) operate the FASTags. Other than digital payment, it also saves time as people need not stop at every booth. As a result, you also avoid waiting in the queue.

The NHAI laid down new rules and regulations that state that the conditions to skip the toll. It is when the waiting time for toll tax at the toll plaza exceeds 10 seconds. In addition to that, if the vehicle is 10 meters away, the vehicle can pass without paying the toll. Hence, this enables seamless transport with lesser traffic congestion. The operators at the toll booth/plaza must draw a yellow line 100 meters from their counters. But, one may encounter issues with FASTags. Since there is an automatic deduction, one may not be able to avoid it. Even if there are long queues, the fee may be deducted as soon as the vehicle approaches the toll booth. Therefore, this is still a challenge to implement the same rules with FASTags.

Difference between a Road Tax and a Toll Tax

One of the most frequently asked questions is why to pay the toll tax after the road tax. It is also a very common doubt as to what is the difference between the two. As mentioned earlier, toll tax is levied only on certain specific tollways. For instance, national or state highway roads for their maintenance and covering the construction costs. It is for the roads under NHAI whereas the road tax is for the state roads. In other words, it is for the road infrastructure of that state where you register your vehicle at the nearest Regional Transport Office (RTO).

Also, the toll tax is applicable only on four-wheeled or larger vehicles each time they cross a toll booth. However, those vehicle drivers who do not pass through toll roads do not pay the toll tax. On the other hand, the road tax applies to every vehicle owner, irrespective of the size/type of vehicle. But, it is a one-time tax.

Comparison Table Between Toll-Tax & Road Tax

Here is a table that explains the basic difference between a road tax and a toll tax:

Toll TaxRoad Tax
Levied by NHAI for interstate/national toll roadsLevied by State or Union territories (UTs) for state’s/territory’s roads
Charged from four-wheeler drivers or those of larger vehiclesCharged from every motor vehicle buyer/owner of all types and sizes
Charged only from the passing-by driversCharged from all vehicle owners who have a registration in the state
Paid at toll booths, toll plazas, or digitally through FASTagsPaid at RTO or online at the official ‘parivahan’ site of the Ministry of Road Transport and Highways
Drivers may pay multiple times if they cross more than one at every toll boothA one-time charge paid at the time of registration
Levied by NHAI (National Highways Authority of India)State-level tax (Levied by State Governments)
Calculated as per the stretch of the road, vehicle size, and the loadCalculated as a percentage of the cost of vehicle
Comparison of Toll Tax and Road Tax

Note: Car Tax or Vehicle Excise Duty (VED) is to be paid every year as per the new norms effective from April 2021. It depends on the age of the car (older than 40 years are exempt) and the carbon emissions, that is how polluting the car is.

Exemptions & Discounts for Toll Tax:

As per the National Informatics Centre (NIC), there is a list of people and vehicles who are exempted from paying the toll tax according to Rule 9 of The National Highways Fee (Determination of Rates and Collection) Rules, 2008. They are:

1. Exempted Dignitaries

No toll tax shall be levied and collected from a mechanical vehicle transporting and accompanying:

  • The President of India
  • The Vice-President of India
  • The Prime-Minister of India
  • The Governor of a State
  • The Chief Justice of India
  • The Speaker of the House of People
  • The Cabinet Minister of the Union
  • The Chief Minister of a State
  • The Judge of the Supreme Court
  • The Minister of State of the Union
  • The Lieutenant Governor of a Union territory
  • The Chief of Staff holding the rank of full General or equivalent rank
  • The Chairman of the Legislative Council of a State
  • The Speaker of the Legislative Assembly of a State
  • The Chief Justice of a High Court
  • The Judge of a High Court
  • The Member of Parliament
  • The Army Commander of Vice-Chief of Army Staff and equivalent in other services
  • The Chief Secretary to a State Government within concerned State
  • The Secretary to the Government of India
  • The Council of States Secretary
  • The Secretary, House of People
  • The Foreign dignitary on a State visit
  • The Member of legislative Assembly of a State and the Member of Legislative Council of a State within their respective State, if he or she produces his or her identity card issued by the concerned Legislature of the State
  • The awardee of Param Vir Chakra, Ashok Chakra, Maha Vir Chakra, Kirti Chakra, Vir Chakra, and Shaurya Chakra, if such awardee produces his or her photo identity card duly authenticated by the appropriate or competent authority for such award
2. Exempted Vehicles

No toll tax from vehicles used for the official purpose by:

  • The Ministry of Defense including those which are eligible for exemption under the provisions of the Indian Toll (Army and Air Force) Act, 1901 and rules made thereunder, as extended to Navy also
  • The Central and State armed forces in uniform. This also includes Paramilitary forces and police
  • An Executive Magistrate
  • The fire-fighting Department or organization
  • The National Highway Authority of India or any other Government organization using such vehicles for inspection or survey. Also, if using for construction or operation of national highways and the maintenance thereof
  • Used as an ambulance
  • Used as a funeral van
  • Mechanical vehicles that are specially designed and constructed for use of a person suffering from a physical disability
3. Exemptions For Common People

Apart from the above exemptions, there are few situations where toll tax discounts for common people can be extended as follows:

  • The executing authority or the concessionaire, as the case may be, shall upon request, provide a pass for multiple journeys to cross a user fee plaza within the specified period at the rates specified in sub-rule (2) of rule 9
  • A driver, owner, or person in charge of a mechanical vehicle who makes use of the section of National Highway, permanent bridge, bypass or tunnel, may opt for such pass and he/she shall have to pay the toll tax per the following rates, namely
Amount PayableMax. no. of one-way journey allowedPeriod of validity
One and half times the toll tax fee for one way journeyTwoTwenty-four hours from the time of payment
Two-third of the amount of the toll tax fee payable for fifty single journeysFiftyOne month from the date of payment
Toll Tax Pass
4. Vehicles For Non-Commercial Purpose

A person who owns a mechanical vehicle registered for non-commercial purpose and uses it as such for commuting on a section of the National Highway, permanent bridge, bypass, or tunnel may obtain a pass, on the payment of toll tax fees at the base rate for the year 2007-2008 of rupees one hundred and fifty per calendar month and revised annually following the Rule 5, authorizing it to cross the user fee plaza specified in such pass:

  • Provided that such pass shall be issued only if such driver, owner, or person in charge of a mechanical vehicle resides within 20 Kilometers from the user fee plaza. It is specified by the person. Also, the use of such section of the national highway, permanent bridge, bypass, or tunnel, as the case may be, does not extend beyond the user fee plaza next to the specified user fee plaza
  • Also provided further that no such pass shall be issued is a service road or alternative road is available
5. Vehicles Registered with District’s Registration Certificate

Other than the point above, a person who owns a mechanical vehicle registered with the address on the Registration Certificate of a particular district and uses such a vehicle for commuting. It also excludes the vehicle plying under National Permit. Therefore, the vehicle can commute on a section of the national highway, permanent bridge, bypass, or tunnel, as the case may be. This must be located within that distance. The commuters shall be levied user fees on all user fee plazas located within that district. The user fee is at the rate of 50% of the prescribed rate of toll tax fee with a further provision. The provision is that no such pass shall be issued if a service road or alternative road is available

6. The User of a Section of a Toll Road

In addition to others, no pass shall be issued or toll tax fee collected from an owner of a mechanical vehicle that uses part of the section of a national highway. Also, if the driver does not cross a user fee plaza. It applies not only to the owner but also to the driver or person in charge of the vehicle when passing by

Wrapping it up:

Hence, we can conclude that the toll tax is an important means of regular revenue to upgrade the roads as per the latest requirements and for smooth travel. FASTag use has further eased the process of payment where you can go cashless as well as avoid waiting in the queues for your turn. All you need to do is apply for FASTag and recharge it. So, you can use your Paytm app to buy and recharge FASTag (from all providers). You must get it at the earliest because the FASTag is now mandatory. Also, you will have to pay double toll tax if you don’t have it.

FAQs
What if I don’t pay the toll tax?
  • If you don’t pay the toll tax, your license renewal will not be done unless the due amount is paid. Also, your registration may get canceled if RTO is informed and they hold it against you. Additionally, the toll tax will rather get incremented because of added fines
  • There is no escape from the toll tax (unless you took an alternative route if available). It is because CCTV footage can get hold of you. Police may be informed if you try to skip it
Can I pay toll tax without FASTag?
No, you cannot pay toll tax without FASTag anymore as it is mandated by the law. GOI plans to make toll tax payments as an online GPS-based revenue collection system. It is because vehicles can pass by without having to stop at toll booths to reduce traffic and promote smooth driving.
Do local vehicle users near the toll plaza also have to pay the toll tax?
Local vehicle users registered in the nearby RTOs within 20 km. are exempted from the toll tax. But, it is only after application and necessary documents submission. They are given a monthly pass for a minimal cost which is valid for five years for government vehicles and one year for private ones.
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