India's new toll tax rules: FASTag to charge per kilometre you move; All about new kilometre-based toll policy 

India is preparing to overhaul its toll collection system. The Ministry of Road Transport and Highways is reportedly working on a new kilometre-based toll policy that would replace the current flat-rate model.

Under the proposed system, vehicle owners will pay tolls based strictly on the number of kilometres travelled, not on fixed slabs. While there is no official government notification yet, multiple media reports indicate that the policy is under serious consideration.

What is the kilometre-based toll policy?

The new policy proposes a dynamic, usage-based tolling system for national highways and expressways. Instead of paying for an entire toll stretch regardless of how far one travels, drivers would pay only for the distance they cover.

According to a report by The Economic Times, the implementation will be supported by advanced toll collection infrastructure, including:

• FASTag scanners at entry and exit points

• High-resolution surveillance cameras to track vehicle movement

• An upcoming system based on Automatic Number Plate Recognition (ANPR) technology

How does this differ from the current system?

Under the National Highways Fee Rules, 2008, toll charges are calculated based on a fixed length of highway, typically around 60 kilometres. Whether you travel 5 km or 59 km, you pay the same toll.

If the new kilometre-based model is adopted:

• Drivers will only pay for the exact kilometres travelled

• No minimum threshold will apply

• The cost of short-distance travel on highways could become significantly more affordable

This marks a substantial shift toward fair pricing and usage-based taxation in road transport.

How will the new toll system work?

Here’s a step-by-step look at how the kilometre-based tolling mechanism would function:

1. Cameras at toll booths will record vehicle number plates using ANPR technology.

2. The system will identify when a vehicle enters and exits the toll road.

3. Toll charges will be automatically deducted from the driver’s FASTag-linked bank account.

4. The toll amount will be based on the actual distance covered, not pre-defined toll slabs.

   Advertisement

5. If the user has insufficient balance, a penalty may be levied under the proposed system.

Barrier-Free Tolling: A Step Further

The government may also use this opportunity to introduce barrier-free tolling, a system that removes physical toll booths altogether.

Benefits include:

• Faster travel with no waiting at toll plazas

• Lower fuel consumption due to reduced idling

• Minimal congestion on busy expressways

• Reduced disputes over incorrect deductions or toll mismatches

If implemented, this would bring India closer to global best practices in highway tolling systems.

FASTag Annual Pass Also Under Review

In parallel with the new tolling policy, the government is also said to be evaluating a FASTag Annual Pass scheme. Under this proposal:

• Vehicle owners would pay a flat annual fee, estimated at ₹3,000

• This pass would allow unlimited travel on national highways throughout the year

• The aim is to simplify toll collection and offer value to frequent highway users