From site to payment
A running account (RA) bill is an interim payment for work measured so far. On a measured contract, every rupee in it should trace back to an entry in the measurement book (MB): what was done, where, in what dimensions, checked by whom. The chain runs like this:
- Work is done on site and recorded in the daily progress report.
- The contractor's engineer records measurements in the MB, item by item against the BOQ.
- The owner's engineer checks the measurements and signs.
- Quantities are totalled into an abstract of cost: up to date, up to the previous bill, and this bill.
- The bill is priced at contract rates, GST is added and the deductions are taken off to get the net payable.
Measurement book entries
A measurement entry identifies the work and shows how the quantity was arrived at, so anyone can re-check it later. For each entry:
- The date of measurement, the name of the work, the agreement number and the RA bill it is for.
- The BOQ item number and description, exactly as in the agreement.
- The location: block, floor, grid lines, chainage for roads.
- Nos × length × breadth × depth, or a direct quantity, with deductions for openings shown as separate negative lines.
- The total for the item and its unit.
- The signature, or digital approval, of the person who measured and of the person who checked.
CPWD contracts now use computerised or electronic measurement books. Clause 6 of the CPWD General Conditions of Contract 2023 has the contractor record measurements in a Computerised Measurement Book (CMB) or an Electronic Measurement Book (EMB) through the CPWD ERP portal, and a Computerised Level Book for levels. The contractor raises a request for inspection; the Engineer-in-Charge or the authorised representative checks the measurements and returns any that need correction. Measurements follow the specifications, or the Bureau of Indian Standards method of measurement where the specifications are silent.
Two rules in clause 6 cause the most trouble on site:
- The contractor must give at least seven days' notice before covering up work, such as foundations or reinforcement, so it can be measured. Work covered without notice or written consent is uncovered at the contractor's cost.
- The contractor provides labour and equipment for checking measurements at no extra charge.
Check measurement and test check
A check measurement is the owner's engineer re-measuring what the contractor recorded. In CPWD, the junior or assistant engineer checks and the senior officers test check a part of the measurements; the CPWD Works Manual 2022 (para 5.14) leaves the extent of test checking to SOP 5/24. The officer who records or test checks a measurement is responsible for its accuracy. Expect corrections, and keep each corrected version: an amended measurement should replace the earlier one with a visible history, not overwrite it.
Cumulative minus previous
RA bills are almost always prepared on cumulative quantities. Each bill restates the total measured to date for every item, and pays the difference from the total in the previous bill. That way an error in an earlier bill corrects itself, and the final bill reconciles with the MB.
| Item | Rate (₹) | Qty up to date | Qty up to previous bill | Qty this bill | Amount this bill (₹) |
|---|---|---|---|---|---|
| RCC M25 in slabs and beams (m³) | 8,000 | 450 | 300 | 150 | 12,00,000 |
| Brickwork in superstructure (m³) | 7,000 | 300 | 200 | 100 | 7,00,000 |
| 12 mm cement plaster (m²) | 300 | 2,000 | 0 | 2,000 | 6,00,000 |
| Value of work done this bill | 25,00,000 | ||||
The figures are illustrative. Up to date the value is ₹63,00,000; up to the previous bill it was ₹38,00,000; the difference is ₹25,00,000. Watch for any item whose cumulative quantity passes the BOQ quantity: that is a deviation, which under CPWD is dealt with by clause 12 and may be paid at a different rate beyond the permitted limit.
The deductions
| Deduction | Basis | Where the rate comes from |
|---|---|---|
| Security deposit or retention | % of the gross bill until the total reaches the limit | Contract. CPWD clause 1A: 2.5% of each bill until 2.5% of the tendered value |
| Mobilisation advance recovery | Instalments, with interest if the advance carries it | Contract |
| Secured advance recovery | As materials paid for go into the work | Contract |
| Income-tax TDS | Amount credited or paid to a resident contractor | Income-tax Act 2025 s.393(1) table Sl.6(i) [194C]: 1% individual or HUF, 2% others |
| GST TDS | Taxable value, excluding GST, where the contract value exceeds ₹2.5 lakh and the buyer is a government or notified body | CGST Act s.51: 2% (1% CGST + 1% SGST, or 2% IGST) |
| Labour cess | Cost of construction, on public works where deducted at source | Code on Social Security 2020 s.100; 1% notified by S.O. 2322(E) dated 8 May 2026 |
| Other | Materials issued, water and power, hire charges, compensation for delay | Contract and issue records |
Two points need care. Whether income-tax TDS is worked on the value before GST or on the full bill: under the 1961 Act, CBDT Circular 23/2017 allowed TDS on the amount excluding GST where GST is shown separately; s.536(2)(j) of the Income-tax Act 2025 keeps such circulars in force so far as they are not inconsistent with it. And the base for security deposit: CPWD says the gross amount of each running and final bill; check whether your contract includes GST in that.
Worked example: net payable
Continuing the abstract above. ABC Infra Private Limited, a company, on a government contract with a tendered value of ₹5 crore. GST at 18% is used for illustration only; see GST on works contracts for the rate that applies to your contract.
| Line | ₹ |
|---|---|
| Value of work done this bill | 25,00,000 |
| Add: GST at 18% | 4,50,000 |
| Bill amount | 29,50,000 |
| Less: security deposit at 2.5% of work value | 62,500 |
| Less: mobilisation advance instalment | 1,50,000 |
| Less: income-tax TDS at 2% under s.393 [194C], on value before GST | 50,000 |
| Less: GST TDS at 2% under CGST s.51 | 50,000 |
| Less: labour cess at 1% | 25,000 |
| Total deductions | 3,37,500 |
| Net payable | 26,12,500 |
The security deposit stops once ₹12,50,000 (2.5% of ₹5 crore) has been held. Income-tax TDS and GST TDS are not costs: the contractor claims the first against its income tax and the second through its electronic cash ledger, once they appear in the annual tax statement and on the GST portal. Check every bill against both. The RA bill deductions calculator does this arithmetic for your own figures, and the mobilisation advance recovery calculator works out the instalments and interest.
When the bill is paid
Under clause 7 of the CPWD GCC, works estimated to cost ₹20 lakh or less are paid only after completion. For larger works, RA bills are submitted each month on the date fixed by the Engineer-in-Charge, as long as the work done since the last bill reaches the minimum in Schedule F. An ad hoc payment of at least 75% of the net amount of the bill under check is due within 10 working days of submission, and the balance after final checking within 28 working days. Interim payments are advances against the final bill: they do not mean the work has been accepted.
Common mistakes
- Billing a quantity that is not in the checked MB, or billing from the contractor's own unsigned sheets.
- Pricing an item at a rate other than the agreement rate, or billing an extra item before it is sanctioned.
- Deducting, or not deducting, openings by habit instead of by the method of measurement the contract names.
- Not reconciling the TDS and GST TDS credits with what the bill shows was deducted.
- Losing the link between a corrected measurement and the bill it changed.
K-Projects records measurements as Nos × L × B × D or a direct quantity per BOQ item, with deductions for openings and an engineer check before an entry counts, warns when a quantity passes the BOQ, and produces the RA bill abstract with previous, this-bill and up-to-date quantities and amounts at BOQ rates.
Common questions
Why are RA bills prepared on cumulative quantities?
Each bill restates the total quantity measured to date and pays the difference from the previous bill. An over- or under-measurement in an earlier bill is corrected automatically, and the final bill reconciles with the measurement book.
What is a check measurement?
The owner's engineer re-measuring, or verifying, what the contractor recorded before the entry counts for payment. In CPWD, senior officers also test check a part of the measurements under the Works Manual and its SOPs.
How much notice must a CPWD contractor give before covering up work?
At least seven days, under clause 6 of the CPWD General Conditions of Contract 2023, so the work can be measured. Work covered without notice or written consent is uncovered at the contractor's cost.
When is a CPWD RA bill paid?
Under clause 7, an ad hoc payment of at least 75% of the net amount of the bill under check within 10 working days of submission, and the balance after final checking within 28 working days. Works costing ₹20 lakh or less are paid only after completion.
Which deductions are taken from an RA bill?
Usually security deposit or retention, advance recoveries, income-tax TDS under s.393 [194C], GST TDS under CGST s.51 for government buyers, labour cess on public works, and other recoveries such as materials issued. The contract sets the rates for the contractual deductions.