NEW DELHI – Government has announced a new digital toll payment rule aimed at cutting cash use on highways, under which vehicles without FASTag will pay higher fees, the Ministry of Road Transport and Highways said on Saturday.
Under the revised rule, effective from 15 November 2025, vehicles entering a toll plaza without a valid or functional FASTag will be charged twice the standard fee if they pay in cash.
However, if non-FASTag users choose to pay via Unified Payments Interface (UPI), they will be charged 1.25 times the applicable user fee. For example, if a vehicle’s FASTag fee is ₹100, the same vehicle will be charged ₹200 when paying in cash and ₹125 if paying through UPI.
Aim to cut cash use and ease congestion
The ministry said the change is designed to encourage cashless transactions, improve transparency in toll operations and enhance the overall experience for highway users. It also aligns with the government’s broader digital payment policy under its “Digital India” initiative.
Officials said the system will help reduce congestion at toll booths by speeding up fee collection and minimising the handling of cash. FASTag penetration already exceeds 98% across National Highways, but a small proportion of vehicles continue to rely on cash, causing delays and manual verification.
The amendment, formally called the National Highways Fee (Determination of Rates and Collection) (Third Amendment) Rules, 2025, reflects the government’s long-term plan to fully digitise toll collection and eventually phase out cash transactions at toll plazas.
The rules first introduced in 2008 for highway fees set out user fees, vehicle categories, exemptions and discount passes but did not differentiate based on mode of payment. The law did not provide for differential rates between cash and digital payments, meaning plazas could not formally favour one mode over another.
The Ministry said the measure reinforces India’s commitment to technology-driven toll management, transparency, and road-user convenience. The higher user fees for cash payers are expected to accelerate the shift toward FASTag and UPI payments.
Officials said the move follows operational experience gained since the rollout of mandatory FASTag use in 2021. While compliance has been high, the government aims to eliminate the remaining instances of cash-based collection, which contribute to longer queues and increased administrative costs.
FASTag and toll revenue
FASTag, introduced by the National Highways Authority of India (NHAI), uses Radio Frequency Identification (RFID) technology to enable automatic deduction of toll fees as vehicles pass through plazas. The tag is linked to a prepaid or bank account and has been central to the country’s effort to digitise tolling systems.
According to NHAI data, over 7 crore FASTags have been issued nationwide, with electronic toll collection accounting for over 98% of total toll revenue on national highways. Daily toll collections average around ₹150 crore, with FASTag transactions accounting for nearly all of it.
Despite the high adoption rate, certain categories of vehicles — particularly commercial fleets and rural users — continue to depend on cash transactions, prompting the ministry to introduce differential charging.
Digital toll payment rule implementation and compliance
The new rule takes effect from 15 November 2025, giving toll operators and payment service providers about six weeks to align their systems. The National Highways Authority of India will issue operational guidelines to ensure compliance across all toll plazas.
The government said the measure is expected to strengthen digital payment infrastructure and promote smoother traffic movement across India’s expanding highway network, which now exceeds 1.46 lakh kilometres.
The ministry did not specify whether the additional 25% fee collected via UPI from non-FASTag users will be retained by the operators or transferred to the central pool. Further details are expected in the implementing circulars closer to the enforcement date.
