NEW DELHI: The Centre is developing a separate category of FASTags for toll-exempt vehicles as part of its nationwide rollout of barrier-free highway tolling under the Multi-Lane Free Flow (MLFF) regime, according to two people aware of the matter.
The proposed system would is expected to allow exempted users, including armed forces personnel and certain government agencies, to pass through toll corridors without being charged or flagged for violations, the people said.
The move is aimed at addressing a key challenge in India’s shift to artificial intelligence (AI)-enabled tolling systems, where every vehicle passing through a toll point must be digitally identified and recorded.
Mint had earlier reported on the government’s plans to shift to , which uses AI, satellite-based tracking and automatic number plate recognition (ANPR) systems to collect tolls electronically while vehicles continue moving at high speeds.
However, the system creates compliance challenges for exempted categories such as defence, paramilitary, and police vehicles. Any unregistered or unrecognized vehicle movement through toll points could automatically trigger e-challans or penalties even in cases where the vehicle is legally exempt from paying toll.
Exempted vehicles could carry specially configured FASTags capable of automatically registering vehicle movement without deducting toll charges, one of the two people cited above said.
Official military vehicles, however, may not require FASTags at all. Their movement through tolling points could instead be tracked through recognition of special defence number plates, with the associated movement data deleted immediately afterward for security reasons, the person added.
To address the issue, the government is evaluating two approaches. One involves sharing a centralised database of exempted vehicles with the ministry of road transport and highways (MoRTH), enabling backend integration with the tolling system. The second involves issuing dedicated carrying unlimited free-pass privileges to authorized agencies,the second person cited above said.
Queries sent to the ministry of road transport and highways, the National Highways Authority of India (NHAI) and the defence ministry remained unanswered till press time.
Exemption challenge
Former defence and road transport secretary Giridhar Aramane said the government had already conducted pilots involving exempted institutions such as the armed forces, police and paramilitary agencies, where vehicle databases were integrated with tolling systems to allow seamless passage.
“The new system brings about challenges for toll treatment of private vehicles used for official purposes that are also in the exempted category. Either details of these vehicles can also be shared with MoRTH or the ministry could issue special FASTags with infinite free movement,” Aramane said.
He added that another alternative could be the use of regular FASTags where toll payments are deducted first and reimbursed later by the concerned department.
The ministry and plan to gradually scale the MLFF system across India’s 146,560-km national highway network. Pilot deployments have already begun at select locations, with plans to cover all existing 1,150 toll plazas over the next year.
The rollout comes amid healthy toll collections. Road toll collections stood at ₹50,345 crore in FY26 through December 2025, compared with ₹61,408 crore in FY25, according to MoRTH.
The government has simultaneously tightened FASTag governance rules to reduce misuse and improve tolling efficiency. Measures include the “One Vehicle, One FASTag” rule, integration of FASTag issuance with the VAHAN vehicle database, and imposing double toll charges on “loose FASTags” not properly affixed to vehicles.
According to Manish R. Sharma, partner and leader for infrastructure, transport and logistics at PwC India, the success of MLFF will depend heavily on execution and the ability to prevent misuse of exemptions.
“These challenges could include misuse of tax exemptions, leakage through cloned or transferred credentials, weak enforcement mechanisms, outdated databases and inconsistent interoperability across states,” Sharma said.
He said the government could consider a centrally maintained exemption whitelist integrated with VAHAN, tamper-proof digital vehicle identities, periodic audits and stronger penalty provisions to improve credibility and enforcement.
Suprio Banerjee, vice-president and co-group head at rating agency Icra Ltd, said embedding exemption status directly at the FASTag or backend account level aligns with global tolling practices and could significantly improve tolling efficiency.