Nowadays almost all highways toll plazas are manually operated, where an operator collects cash from the driver and provides a receipt. Since this procedure can be slow, we often encounter traffic jams at the toll plazas on busy highways. Automatic process of toll collection will save time, effort, and man power. In this work propose a low cost and efficient technique called Electronic Toll Collection using RFID modules that automatically collects the toll from moving vehicles when they cross the toll plaza. We also assume that an owner maintains a prepaid account, so that toll tax is deducted automatically from the driver's account at toll plaza. If the balance in the owner's account is low or if the vehicle is not equipped with an RF system, the toll gate remains close. In such a case vehicle owner will have to pay the toll tax in cash and collect the receipt. The owner receives an SMS message on his/she mobile about the details of the payment and there is no need for him to stop the vehicle. How many vehicles passing through the toll gate stored in a database. We can also find out a vehicle how many times passing through the toll gate in a day. Through this process of toll collection will save time, effort and man power.