Lok Sabha Question No. 555 (STARRED), answered on 2026-04-02
Subject: Multiple Layers of Taxation on Vehicles
Ministry: ROAD TRANSPORT AND HIGHWAYS
Asked by: Shri Vijay Kumar Hansdak

## GOVERNMENT OF INDIA MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

LOK SABHA STARRED QUESTION NO - 555 ANSWERED ON- 02 nd  APRIL, 2026

## MULTIPLE LAYERS OF TAXATION ON VEHICLES

*555 SHRI VIJAY KUMAR HANSDAK :

Will the Minister of ROAD TRANSPORT AND HIGHWAYS

सड़क परिवहन औि िाजमार्ग मंत्री

be pleased to state:

- (a)  whether  the  Government  has  any  proposal/plan  to  reduce  the multiple tax burden on vehicles such as Road Tax, Fuel Tax and Toll Tax;
- (b) if so, the details thereof along with the steps taken in this regard and if not, the reasons therefor; and
- (c) whether the Government intends to waive off Toll Tax if the waiting time at toll plazas exceeds five minutes and if so, the details thereof?

## ANSWER

THE MINISTER OF ROAD TRANSPORT AND HIGHWAYS

(SHRI NITIN JAIRAM GADKARI)

(a) to (c) A statement is laid on the Table of the House.

STATEMENT REFERRED TO IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  THE LOK  SABHA  STARRED  QUESTION  NO.  *555  FOR  ANSWER  ON  02 nd April,  2026  ASKED  BY  SHRI  VIJAY  KUMAR  HANSDAK  REGARDING

MULTIPLE LAYERS OF TAXATION ON VEHICLES.

- (a) to (c)  The  Constitution  of  India  empowers  the  States/Union Territories to make law for levy of motor vehicle tax.

The excise duty or cess on fuel is imposed by the Central Government and  utilized  for  infrastructure  development  and  maintenance  related activities, including for railways, rural roads, National Highways (NH) etc. The Government undertakes fiscal interventions in the petroleum sector, as and when required, to protect consumers from volatility in international crude oil prices. Some of them are as follows:

-  In  November  2021  and  May  2022,  the  Central  Government reduced Central Excise Duty by a total of Rs. 13/litre  on  petrol and Rs. 16/litre on diesel in two tranches, which was fully passed on to consumers.
-  In  March  2024,  Oil  Marketing  Companies  (OMCs)  reduced  retail prices of petrol and diesel by Rs. 2 per litre each.
-  In  April  2025,  the  increase  of  Rs.  2  per  litre  in  excise  duty  on petrol and diesel was not passed on to consumers.
-  Recently,  in  view  of  rising  international  crude  oil  prices  due  to the Middle East crisis, the Government has reduced excise duty by Rs. 10 per litre each on petrol and diesel to absorb part of the burden on consumers

The user fee i.e. 'toll' is payable by motor vehicles for use of a section of a National Highway and is levied under the provisions of section 7 of the  National  Highways  Act,  1956  (48  of  1956)  and  rules  made thereunder. The user fee collected at fee plazas on National Highways is  utilized  for  rendering  services  or  benefits on National Highways in accordance with the provision of National Highways Fee (Determination  of  Rates  and  Collection)  Rules,  2008.  The  revenue collected  by  the  Central  Government  from  user  fee  collection  is deposited  in  Consolidated  Fund  of  India  (CFI)  and  the  fund  provided through  budgetary  allocation  are  utilised  for  further  maintenance, development and augmentation of National Highways. There is no provision in the National Highways Fee (Determination of Rates  and  Collection)  Rules,  2008  for  waiver  of  user  fee  based  on waiting time at fee plazas. Declaration of all lanes of fee plazas on National Highways as FASTag Lane of the fee plaza with effect from midnight of 15th/16th February, 2021, has resulted in seamless movement at user fee plazas, reduced waiting times, and alleviated congestion, thereby improving efficiency at fee plazas on National Highways. Impact Assessment conducted for the  National  Electronic  Toll  Collection  (NETC)  Programme  during 2024-25 indicates that the average time taken by a vehicle to cross a fee  plaza  under  ETC  operations  is  around  40  seconds,  compared  to 12:23  minutes  per  vehicle  under  the  earlier  manual  tolling  system, demonstrating a substantial improvement in traffic flow and reduction in congestion. Further,  the  Government  from  time  to  time  has  reviewed  the  tolling policy  with  the  objective  of  ensuring  a  balanced  approach  between revenue requirements for highway development and minimizing burden on road users. To further reduce the burden on road users, Government has inter-alia made the following amendments: (i) GSR 437(E) dated 01.07.2025, to restrict user fee for highways with more structure length. (ii)  GSR  01(E)  dated  31.12.2025  for  reduction  of  rates  in  case  of  up gradation from two lane paved shoulder highway to four or more lane. (iii)  G.S.R.  388  (E)  dated  17.06.2025  introducing  an  Annual  Pass  for non-commercial cars, jeeps, and vans. This scheme offers 200 NH fee plaza crossings or one year validity, whichever is earlier, by payment of ₹ 3000/- (Rupees three thousand). (iv) G.S.R. 734 (E) dated 03.10.2025 for reduction in applicable user fee for vehicles without FASTag or active FASTag vehicles from 2 times to

1.25 times, given the user opts for payment through UPI;

(v) G.S.R. 107 (E) dated 04.02.2026 for the fee payable for the use of a national expressway that is operational for only a part of its notified length  shall  be  levied  at  a  rate  of  one  time  of  the  applicable  fee instead of 1.25 times.

Furthermore, to enhance toll operations and enable seamless movement  of  vehicles,  the  Government  has  decided  to  implement Multi-Lane Free Flow (MLFF) Electronic Toll Collection System, which facilitates  barrier-free  tolling  using  integrated  technologies  including Automatic Number Plate Recognition (ANPR) with Artificial Intelligence analytics and high performance Radio Frequency Identification (RFID) - based Electronic Toll Collection (FASTag), where the user fee shall be charged from the vehicle users without halting at the toll plaza for the purpose.

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