What is Toll Tax: Meaning, Rules, Validity, Time, Exemption List

What is Toll Tax in India?

Road charges, often known as “tolls, "are the taxes you pay for using interstate expressways, bridges,  tunnels, and national or state highways. In India, the entire road network, including toll taxation policies and systems, falls under the purview of the National Highway Authority of India (NHAI).

NHAI has laid down various rules and regulations that determine the collection process. These rules include certain exemptions for taxes, tax validity, rules on how the road charges for a particular highway/expressway are determined, and much more. 

In this article, we will learn about road usage charge collection, calculation, and other details about road charges in India.

Why is Toll Tax Collected?

India has one of the greatest roadway networks in the world. Road charges or taxes are collected to ensure that funds are constantly generated for road repair and maintenance. Hence, a paying station is often set up on roads, and the tax amount collected is used to maintain the quality of roads and improve infrastructure to ensure quick distance coverage.

However, the charges for every expressway, highway, bridge, or tunnel are not the same. There are several factors that determine the tax for a particular road network which we will cover in this article.

Toll Tax Rules in India

Although road charges are a great way to ensure the quality of road networks stays up to date, there are certain rules NHAI has laid down regarding them. These rules must be taken into consideration before collecting road charges on any road network across India. 

• Tax Rates: As laid down by NHAI, the taxes at any particular booth must be fixed and equal for everyone. The amount or rate levied must be determined by the vehicle type, distance travelled, and time of the day. 
• Location: Toll plazas cannot be built at any random spot on the road. They must be constructed with utmost care to avoid causing excessive traffic or safety concerns for the public. Also, environmental impact should be considered before deciding the location.
• Tax Exemption List: Official rules of tax collection also lay down that certain special categories of vehicles are not required to pay any road charges under any circumstances. These include emergency vehicles, military and public vehicles. 
• Collection Methods: Road charges can be collected at any booth in the country through multiple modes of payment, including physical or digital payment. It is important to have the necessary technology in place to collect taxes efficiently and effectively.

These are some of the most essential toll tax rules that one must know regarding road charges. These rules ensure that road charges are collected in a genuine way to ensure road quality and public safety.

Note: Private vehicle owners with a functioning Global Navigation Satellite System (GNSS) will now enjoy a toll-free allowance for the first 20 kilometers of their daily journey on national highways. Beyond this distance, tolls will be charged based on the actual kilometers traveled. This update follows the Ministry of Road Transport and Highways' revision of the National Highways Fee Rules, 2008. The GNSS-based system will complement the existing FASTag system.

What is the Validity Time for a Toll Tax?

The NHAI has also laid out rules related to the validity time of road charges. These rules are generally favourable for people travelling frequently on the road. Let us learn about them in detail.

• The validity time rule states that if the vehicle passes through the booth twice within 24 hours, only one and a half times the total road charge needs to be paid.
• The rules specify that only two-thirds of the total booth tax amount is payable for more frequent travellers. This amount is valid for up to 50 journeys within 30 days from the day the payment was collected.

Who All are Exempted from Paying Toll Tax?

Undoubtedly, the NHAI lays down that taxes are to be equally imposed on all individuals using the road, yet there is a toll tax exemption list that exempts vehicles of a particular category from paying the toll.

According to NHAI, if you fall under any of the below 5 categories, you don’t have to pay any road charge at any booth across India:

• Emergency vehicles such as ambulances, fire brigades, and other similar vehicles need not pay any road tax upon crossing the booth.
• Defence vehicles, including trucks, army cars, and other similar vehicles that come under the direct control of the defence department, are also exempted from paying any toll tax.
• VIP vehicles carrying or accompanying distinguished individuals, such as the President of India, the Prime Minister of India, Chief ministers, Members of Parliament, and High Court Judges, are exempt from paying road charges.
• Public transport, such as state buses, are exempt from paying road charges as per NHAI guidelines.
• Lastly, two-wheelers are also exempt from the list of taxpayers. Hence, any two-wheeler using the road need not pay any charge upon crossing the booth.
• Private vehicle owners with a functioning Global Navigation Satellite System (GNSS) will now enjoy a toll-free allowance for the first 20 kilometers of their daily journey on national highways.

Toll Tax Charges

Road charges for various road networks may vary based on various facts. The NHAI has laid out strict guidelines to determine the charges at any booth across India.

• Type of Vehicle: Paying fee is calculated for different vehicles based on their size. This means that heavy vehicles such as trucks and buses will have to pay more charges as compared to cars. This is due to the fact that heavy vehicles cause more damage to the roads as compared to small vehicles.
• Load Capacity: Load capacity is another key factor in determining a vehicle's road charge. Vehicles with more load capacity damage the roads more, and vice versa.
• Passenger Car Unit: The road charge is also calculated based on a vehicle's capacity to carry passengers. In accordance with the Government of India, there is no toll tax for pedestrians, and two-wheelers are exempt from paying toll charges.

Thus, based on these factors, the road charges for any particular vehicle are determined and charged. These rules are commonly followed for almost every road network throughout India.

Advantages and Disadvantages of Toll Tax

Here’s a list of key advantages and disadvantages of toll tax. Let’s understand them in detail:

Advantages of Toll Tax

• High-Quality Roads: Collecting road charges ensures sufficient revenue to maintain road quality. This ensures that the roads are well-maintained and constantly looked after to ease travellers journey.
• High-Safety Travels: A well-maintained road ensures fewer accidents, thus increasing the safety of travellers greatly.

Disadvantages of Toll Tax

• High Cost: While road usage charges can be necessary, they might often prove to be a burden for frequent travellers. Moreover, using such roads can be expensive and will only add up to the cost of the travellers' journey.

Major Difference Between Road Tax and Toll Tax

Conclusion

Toll booths in India are a great way to ensure that the Indian road networks stay up-to-date and operational. Knowing more about the toll taxation rules in detail is beneficial as it helps the common man take advantage of any relaxations or exemptions laid down by the government.