Incentivized Fee Collection for Non-FASTag Users

In a major step toward enhancing digital payments and promoting seamless, contactless tolling operations across India’s National Highways, the Government of India has introduced key amendments to the National Highways Fee (Determination of Rates and Collection) Rules, 2008, along with a comprehensive Standard Operating Procedure (SOP) for UPI-based toll payments. These measures mark a significant stride toward the government’s vision of achieving a 100% digital and barrier-free tolling ecosystem.

The amended rules, notified through G.S.R. 734(E) on October 3, 2025, and announced via a government press release on October 4, 2025, introduce a differentiated user fee structure based on the mode of payment. Under the revised framework:

1. FASTag Payments: Vehicles using FASTag will continue to pay the regular applicable toll fee.
2. Digital Payments via UPI: Vehicles without a valid FASTag may now pay the toll fee via Unified Payments Interface (UPI) at 25 times (1.25x) the applicable rate.
3. Cash Payments: Vehicles choosing to pay in cash will be charged twice (2x) the applicable toll fee.

The move aims to reduce cash handling, enhance transparency, and promote faster, contactless transactions at highway toll plazas.

To implement the initiative, the National Highways Authority of India (NHAI), through its subsidiary Indian Highways Management Company Limited (IHMCL), has issued a Standard Operating Procedure (SOP) to guide the nationwide rollout of UPI-based toll payments. The SOP defines the roles and responsibilities of NHAI’s Regional Offices, Project Implementation Units (PIUs), concessionaires, system integrators, and acquirer banks, ensuring consistent and coordinated implementation across different project models, including EPC, HAM, BOT, InvIT, and TOT.

The SOP provides a project-specific framework to ensure seamless integration with existing toll management systems:

• Public-Funded Plazas Handed Over to IHMCL: Implementation through IHMCL’s designated system integrators.
• Hybrid Annuity Model (HAM) and Engineering Procurement Contract (EPC) Projects: Implementation by EPC contractors or HAM concessionaires under Change of Scope (CoS) provisions at the IHMCL-discovered price, with integration to their toll management systems (TMS) and acquirer banks.
• Build-Operate-Transfer (BOT), Infrastructure Investment Trust (InvIT), and Toll-Operate-Transfer (TOT) Projects: Implementation by respective concessionaires under CoS, ensuring synchronization with their existing TMS and acquirer banks.
• Boothless Plazas: Display units will be installed only in outermost lanes equipped with booths, in accordance with NHAI Policy Circular No. 17.5.82, dated May 24, 2021.

At toll booths, dynamic QR codes will be displayed on TFT/LED screens, enabling real-time UPI transactions for vehicles without FASTags. Each unit will be installed at a standardized cost of ₹6,600 per lane, inclusive of installation, networking, integration, and five years of maintenance.

This technology upgrade ensures secure and instant digital payments, reducing dependency on cash and physical receipts while improving transaction speed and convenience for road users.

The SOP also establishes a fully automated financial settlement system for toll payments made via UPI. The acquiring bank will automatically distribute the 1.25x user fee as follows:

• 1x of the user fee will be remitted to the toll collecting agency or concessionaire.
• 25x of the user fee will be remitted to NHAI.
• A Program Management Fee (PMF) of 0.11% of the total 1.25x user fee will be deducted by the acquiring bank from NHAI’s share.

This mechanism ensures transparent accounting, timely settlements, and operational efficiency across all stakeholders.

Project Directors have been authorized to approve Change of Scope proposals and release payments at standardized rates for all project categories. Each change will be treated as an independent CoS arising from the statutory amendment under G.S.R. 734(E).

Scheduled for full rollout by November 15, 2025, the initiative reinforces India’s vision of 100% digital tolling, minimizing congestion, reducing manual operations, and advancing the goal of smart, efficient, and transparent highway management.