RA bill guide for civil contractors

A running account (RA) bill is how a contractor on an item-rate or BOQ contract gets paid while the work is still going on. It looks like a single sheet with a net payable at the bottom. In practice it is a package: an abstract of cost, the measurement sheets behind every quantity, a deviation statement, a recovery schedule and a tax invoice. Each part has to agree with the others and with the bill before it.

This guide walks through that package in the order a billing engineer builds it. The worked examples use one work order throughout: a ward office building for PWD Pune (East) Division, RA Bill No. 7, for work done from 1 to 31 October 2026, with a net payable of ₹18,49,293. Every figure in the examples can be checked with a calculator.

Tax rates, recovery percentages and thresholds in this guide are the example contract's configured rates or the rule as the named Act states it, last checked on 10 November 2026. Your contract and the current notifications decide the figures on your bill.

1. What an RA bill is

RA stands for running account. An RA bill is an on-account payment for work done up to a date. It is cumulative: every bill states the total quantity of each item executed since the start of the contract, then takes away what was paid in earlier bills. The difference is what this bill claims.

Because RA bills are payments on account, their quantities are provisional. A quantity the client's engineer cuts on RA 5 can be claimed again on RA 6 once the evidence is in, and an overpayment on RA 5 is corrected on a later bill. Nothing is final until the final bill.

The final bill is prepared after the work is complete. It closes every cumulative quantity, reconciles mobilisation and secured advances, settles client-issued material, and fixes the retention to be released after the defect liability period. Mistakes carried through the RA bills surface here, often years after the work was done.

A part-rate payment is a payment at less than the full BOQ rate for an item that is not finished or not yet accepted. The balance is paid when the item is complete. Contracts that allow part rates usually leave the reduced rate to the engineer-in-charge.

Worked example: 18 aluminium windows (W1, 1.50 x 1.20 m) are fixed but not glazed. The BOQ rate is ₹6,200 a sqm, and the engineer-in-charge allows a part rate of ₹4,960 (80%) until glazing. Area: 18 x 1.50 x 1.20 = 32.40 sqm. This bill: 32.40 x 4,960 = ₹1,60,704. When glazing is done, the item is billed at full rate, 32.40 x 6,200 = ₹2,00,880, and the next bill claims the balance of ₹40,176.

2. From measurement to abstract

The abstract of cost lists every BOQ item with three quantities: up to date, previous and this bill. The up-to-date quantity is the sum of all approved measurements for the item since the start. The previous quantity is the up-to-date quantity of the last certified bill. This bill is the difference, and the amount is this bill's quantity times the rate.

Here is item 3.2, RCC M25 in slabs and beams, at ₹8,965 a cum, across four bills. Each previous column is the up-to-date column of the bill above it.

Check the chain: the four this-bill quantities add up to 65.20 + 72.50 + 69.70 + 74.20 = 281.60 cum, which is 412.80 minus 131.20. If that check fails, a quantity has been lost or billed twice. Across the six items of RA 7 the value of work done this bill comes to ₹20,84,879.05.

Where the chain breaks. The most common break is taking the previous quantity from the bill you submitted. It must come from the bill the client certified. Suppose RA 6 claimed 338.60 cum but the engineer-in-charge certified 330.00, holding 8.60 cum for a slab thickness query. RA 7 must then show previous 330.00 and this bill 82.80 cum (₹7,42,302). If it shows 338.60, the client's figures and yours no longer match, the bill comes back, and the 8.60 cum (₹77,099) is easily forgotten.

• Split items. When a BOQ item is split or renumbered mid-contract, the cumulative quantity must be carried to the new items. Starting them at zero bills the old quantity again, or loses it.
• Withdrawn measurements. A correction that reduces an up-to-date quantity gives a negative this-bill figure. Show it as a negative figure with a note, in its own item.
• Rate changes. When part of a quantity is payable at a revised rate, for example beyond a deviation limit, keep two lines for the item so the cumulative quantity at each rate stays clear.
• Rounding. Round the way your client does, at the same stage. A rupee of difference on a recovery line is enough for a bill to be returned.

3. Modes of measurement

The quantity of an item depends on how it is measured. In Indian building and civil works, the method of measurement is set out in IS 1200, published by BIS in parts, one for each kind of work. Most contracts adopt it, and many add their own mode of measurement or specifications on top. The contract wins where the two differ.

Read three things before measuring any item: the BOQ item description, the contract's mode of measurement, and the relevant part of IS 1200. They answer the questions that cause most cuts: whether openings are deducted, whether a beam is measured below the slab, whether steel is paid on theoretical weight, and whether working space in excavation is paid.

• Openings in masonry and plaster are deducted, deducted on one face, or ignored depending on their size and the contract's rule.
• RCC beams are commonly measured for their depth below the slab, so the slab volume is not counted twice.
• Reinforcement is usually paid on the weight worked out from the bar bending schedule at standard weights per metre.
• Road layers are paid on compacted volume to drawing lines, proved by levels taken before and after laying.

Where a contract requires the engineer-in-charge to record measurements in the department's official measurement book, the contractor's own record does not replace it. It is the evidence that makes the official entries fast to agree. Measure jointly where you can, and keep the drawing reference, date and photo with every row. The measurement guides cover 20 common items with worked examples.

4. Deviations, extra items and substituted items

A deviation is a change in the quantity of a BOQ item: more or less than the BOQ quantity. An extra item is work ordered that has no BOQ item at all. A substituted item replaces a BOQ item with a different specification. Each is paid only when it is documented the way the contract asks.

Many contracts set a deviation limit for each item. Within it, extra quantity is paid at the BOQ rate. Beyond it, the rate may be open to revision, and the excess often needs approval before it can be paid. Read the limit in your own contract.

Worked example: item 7.3, vitrified tile flooring, has a BOQ quantity of 1,300 sqm at ₹1,185 a sqm. Corridors were added on floors 2 and 3 by revised drawing A-210 R1, and the anticipated final quantity is 1,520 sqm. The deviation statement shows an excess of 220 sqm, worth 220 x 1,185 = ₹2,60,700, with the drawing as the reason.

• Get the instruction in writing before the work is done, and quote its reference on every bill.
• Submit the deviation statement when the item reaches about 80% of its BOQ quantity, before it runs over.
• Build extra item rates the way the contract asks: from the schedule of rates (SOR) where a similar item exists, otherwise from market rates with quotations.
• Show a substituted item against the item it replaces, so the saving on the original is visible.

5. Recoveries, line by line

Between the value of work done and the net payable sit the recoveries. Each is set once per contract and applied the same way on every bill. Here is RA Bill No. 7, at the example contract's configured rates.

• Retention or security deposit is a percentage of each bill held until the defect liability period ends. There is no standard rate; use the one in your contract and watch any cap on the total.
• Mobilisation advance is recovered in the instalments the contract sets, with interest on the outstanding balance at the contract's rate. In the example, ₹9,90,000 was outstanding before this bill at the contract's 15% a year, for one month.
• Secured advance is paid against non-perishable material brought to site and recovered as the material is used. Recover it on the bill in which the material went into the work: here 800 bags of cement at ₹400 a bag, advanced at 75%.
• Client-issued material such as cement or steel is reconciled against the theoretical consumption of the billed quantities. Consumption above the allowed variation is usually recovered at a penal rate.
• Labour welfare cess under the Building and Other Construction Workers' Welfare Cess Act, 1996 is levied at 1% of the cost of construction and commonly deducted from contractor bills.
• Income-tax TDS on contract payments was under section 194C of the Income-tax Act, 1961 (1% for an individual or HUF, 2% for others). The Income-tax Act, 2025 applies from 1 April 2026 with renumbered provisions, so quote the section your client's certificate uses.
• GST TDS under Section 51 of the CGST Act is deducted by government departments, local authorities and notified bodies at 2% of the taxable value (1% CGST plus 1% SGST, or 2% IGST) where the contract value exceeds ₹2.5 lakh.
• Liquidated damages and penalties are entered only when the client levies them, with the letter as reference. Never compute them yourself.

Each of these lines has a calculator that shows its rule and the date it was last checked.

6. GST on works contracts

Works contract services fall under SAC heading 9954. The GST rate depends on the type of work and on the client, and the rates were restructured with effect from 22 September 2025. Do not carry a rate over from an older contract or another site: confirm the rate for each work order with your tax adviser and configure it once. The 18% in the example is that contract's configured rate, not a statement of the law for your work.

• Place of supply decides whether the invoice carries CGST and SGST or IGST. Set it per work order.
• Invoice timing follows the time of supply rules. Agree with your adviser whether the tax invoice is raised on submission or on certification, and do it the same way every time.
• E-invoicing is mandatory for taxpayers whose aggregate turnover exceeded ₹5 crore in any financial year from 2017-18. The invoice then needs an IRN and QR code from the invoice registration portal before it goes to the client.
• GST TDS deducted by a government client is not a cost. Match each bill's deduction against the credit shown on the GST portal.

7. Price variation

Price variation clauses compensate the contractor, or the client, for changes in input prices after the base date. In CPWD contracts this is commonly known as clause 10CC. Most such clauses use an index formula: the value of work done in the period is split into component shares (labour, cement, steel, other materials, fuel), and each share moves with its published index.

Price variation = value of work done x the sum of (share / 100) x (current index - base index) / base index, for each component. The shares, the indices, the base month and the items excluded from the value all come from your contract.

Worked example: value of work done in the quarter, after exclusions, ₹20,00,000. The example contract's shares and indices give:

A component whose index falls, steel here, reduces the total. When the total is negative, it is recovered from the contractor. Work it out every period, even when it looks small, because a missed quarter is hard to claim at the final bill. The price variation calculator uses this formula.

8. Getting paid

A bill is paid only after the client's engineer-in-charge or PMC certifies it. Certification is line by line in practice: some lines are certified in full, some in part, and some held with a query. The faster the checker can trace each quantity to its measurement, drawing and photo, the fewer lines are held.

• Log every cut with its reason and reply in writing. A held quantity is claimed again on the next bill, with the answer attached.
• Reconcile claimed against certified, per bill and cumulative, so the previous column of the next bill is right.
• Track the certified date, the due date and the payment received, with the deductions made at payment.

MSME payment rules. Under Sections 15 and 16 of the MSMED Act, 2006, a buyer must pay a micro or small enterprise within the agreed period, which may not exceed 45 days from acceptance. On a delay, interest is compound with monthly rests at three times the bank rate notified by the RBI. From FY 2023-24, Section 43B(h) of the Income-tax Act, 1961 lets the buyer deduct such a payment only when it is made within that limit. Cases can be filed with the Micro and Small Enterprises Facilitation Council through the MSME Samadhaan portal.

Worked example: RA 9 of ₹28,46,500 was paid 45 days after its due date. With a bank rate of 5.75% (the rate used in this example), interest runs at 17.25% a year compounded monthly. Forty-five days is 45 / (365 / 12) = 1.479 months, so interest = 28,46,500 x ((1 + 0.1725 / 12) ^ 1.479 - 1) = ₹60,745.

Retention release. Retention is not released on its own. Track the end of the defect liability period from the completion date, and send the release letter with an annex of retention deducted bill by bill on the day the period ends. The total in the annex must match the client's ledger.

9. RA bill workbook template

The templates below are the sheets of an RA bill package, each with its columns and rows filled from the example work order, so the arithmetic can be checked. They download as CSV and open in Excel, Google Sheets or LibreOffice.

• RA bill abstract of cost: up to date, previous and this bill for every item.
• Detailed measurement sheet: nos, L, B, D and quantity with drawing references.
• Deviation statement and extra item statement.
• Recovery schedule, secured advance register and cement and steel reconciliation.
• BBS to weight sheet, retention release letter and delayed payment interest claim.

The preparation steps, in order:

1. Set up the work order: import the BOQ, and configure the retention, advance, cess, TDS, GST TDS and GST rates from the contract.
2. Record measurements at site against BOQ items, jointly where possible, with the drawing reference, date and photo for each row.
3. Check each measurement against the contract's mode of measurement and approve it before the bill cut-off date.
4. Build the abstract: up-to-date quantity from approved measurements, previous quantity from the last certified bill, this bill as the difference.
5. Prepare the deviation statement and extra item statement for every item over or outside the BOQ, with approval references.
6. Apply the recoveries line by line, from value of work done to net payable, at the contract's configured rates.
7. Raise the GST tax invoice at the rate configured for the contract, with the IRN where e-invoicing applies.
8. Send the bill package with a cover letter, and track certification, payment and retention release.

In Tatha Vastu the same package is built from approved measurements: the previous column comes from the last certified bill, recoveries apply at the contract's configured rates, and the client's engineer checks each line in the bill room. Tatha Vastu prepares the bill; certification stays with the engineer-in-charge, and tax filing with your accountant.