Smart toll collection is one of the automatic identification technologies that has been used to reduce manpower, time in maintaining the toll system in the highways. This paper proposes an efficient and low cost vehicle-to-roadside communication technique called Smart E-Toll using RFID which automatically collects toll from the moving vehicles and monitors them as they cross the toll plaza. Each vehicle is identified by a unique ID through its RFID tag. When this tag is interrogated by a reader it transmits the ID of the vehicle over a radio frequency link. This ID is processed further and the cash is deducted from the user's account. Further this RFID card can also be used to block the stolen vehicles from passing. The number and the type of vehicles passing can also be tracked from the database.