National Highways and Toll Tax

                                                     

Government is building new four and six lanes highways for faster, smoother and less fuel consuming highways in order to give the road transport a boost besides making it safer and smoother. This is required if the economy is to get a boost and make communication between different cities and states better. This will also lead to making it available better medical, educational and other facilities to the area where it was not impossible but difficult to get these facilities easily. This massive project comes under the ministry of surface transport and is the responsibility of National Highway Authority of India (NHAI). These projects are capital intensive and require huge amount of investment which can only be recovered with a large gestation period only.

PPP (Public Private Partnership) model was therefore evolved in order to promote private partnership in these road building projects, where the investment comes from the private sector and the land is made available by the government under the public partnership. These private companies are given the right to collect toll on these section of roads which they develop for a fixed period of time under a contract. The length of this toll collection is based on a projected figure of average number of vehicles using the section and an average toll collection.  The collector is expected to provide certain facilities on this section and to maintain the stretch in good shape during the period of contract, which is normally found to be absent.

Highway tax forms a part of the indirect tax which is added to the fuel price by the government. It is this toll tax which is in addition to this highway tax which has become a bone of discomfort to the users of this highway. The notification by the government provides for some type of users as being exempt from paying this toll tax. Besides these statutory exemptions there are others who try to get to use the highway without paying this tax. This includes the local population, local or other political leaders and their supporters who refuse to pay these taxes. This leads to shuffle and everyday there are reports of fight, firing and breaking of toll tax barriers by miscreants who terrorize the persons manning these barriers. Besides these on high density sections there is invariably a long queue of vehicles waiting to pay the toll tax and sometimes it takes anywhere from 10 minutes to 30 minutes to cross a barrier besides increase in fuel cost due to this long waiting period and slow movement. The removal of toll barrier at the Delhi- Haryana border near Gurgaon was a classic example of these jams even though there were supposed to be 32 toll collection booths in operation and ultimately led to its removal by Haryana government. This has now led to the jams being reported from the roads leading to NH 8, namely the Dhaula Kuan Road and Rao Tula Ram Marg.

If it is the duty of every citizen to contribute towards the development of the nation then why it is so that only a few persons end up paying for these taxes and others get away with it due to local, political or gun power. It is grossly unfair to the large number of honest tax paying individuals. There is, therefore, a requirement to ensure that all persons who use the particular section of the road pay the toll tax. It is other requirement that certain person, who are exempt can be reimbursed these toll taxes later on, but to be fair it is the duty of the government to ensure that  every citizen of India irrespective of who or what duty he is performing as an official  of the government pays the tax. This will not only bring a transparency in the collection system but will also make it fair and efficient.

The other option is to do away with these large number of ever increasing toll tax booth on the highways and make the movement of traffic smooth and faster, which will not only reduce the time taken to reach destination but will also save energy, consumption of fuel and wear and tear of vehicles. This will also mean more number of trips for the transport sector and will not only boost economy but will also improve the earning capacity of this sector. But the point remains as to how the government or the private sector is going to recover its money and earn profit so that this investment becomes viable and able to fuel the growth of this road development sector. The money earned can be utilized to invest in other areas of road development and also on the maintenance of the existing roads. The option is to go in for an indirect taxation rather than direct taxation through the collection of toll at these toll barriers. This indirect taxation which could be in the form of an increase in excise duty or VAT or a fixed amount added to the price of fuel along with highway tax and reimbursed to the private company which has developed that particular section of highway. Of course this will involve an agency and suitable record maintenance to implement and maintain these records but the benefits far outweigh the problem of this difficulty. This will also increase the amount of toll collection as all vehicles run on fuel only and hence will end up paying the toll irrespective of who he is or what is his post or power. This will also bring in a lot of transparency in the system and will reduce the wait on toll tax barriers and faster movement of traffic on the highways thus reducing the travel time considerably.