RA Bill Format and Process: A Contractor's Guide

If you are a contractor working with builders or developers in India, RA bills are how you get paid. Get the format, calculations, and approval workflow right and your cash flow stays smooth. Get them wrong and you spend more time chasing payment than running the site.

This guide walks through the RA bill format, the line-by-line process, retention and TDS treatment, GST, and the approval workflow that actually works in practice across Indian builders.

What is an RA Bill?

RA bill is short for Running Account bill. It is a periodic bill — almost always monthly on Indian sites — that the contractor raises for work completed against the BOQ during that period. The word "running" matters: each bill is cumulative. RA-1 covers up to month 1, RA-2 covers up to month 2 (so it includes RA-1 quantities), and so on. The very last bill, when the project is complete, becomes the Final Bill and closes the running account.

This cumulative method is the standard in Indian construction because it lets either side correct errors in earlier bills. If RA-3 forgot to include 10 cum of slab, RA-4 simply shows updated cumulative quantity, and the difference is paid in RA-4.

Standard RA Bill Format (Sections)

A typical RA bill in Indian construction has six clear sections. Builders may add their own logo, project codes, and approval boxes, but the core never changes:

1. Header. Contractor name, GSTIN, address. Builder name, project name, contract number, contract date. RA bill number, period covered, date of submission.
2. BOQ-wise progress. The biggest section. For each BOQ item: item code, description, unit, total contracted quantity, cumulative quantity to date, previous bill quantity, this bill quantity, rate, this bill amount, cumulative amount.
3. Extra items. Items not in the original BOQ but executed with builder's approval. Each requires a written instruction or change order reference.
4. Material issued by builder. Cement, steel, sand sometimes supplied free by the builder. These are deducted at agreed rates.
5. Deductions. Retention, TDS, GST TDS, advance recovery, penalty (if any), other deductions.
6. Net payable. Bottom-line amount due, with previous payments and balance.

Sample RA Bill Calculation

Let us walk through a simplified RA-3 bill for a residential building contract to make this concrete.

This is illustrative. Actual rates of TDS and GST depend on contractor type and works-contract category. Always confirm with your CA — the numbers shift each Budget cycle. Also note: GST treatment can vary; certain construction services attract 1%, 5%, 12% or 18% depending on category — see our GST on construction services in India 2026 guide.

Retention, TDS & GST Treatment

Retention

Builder holds back 5% to 10% of every RA bill as security. The percentage is fixed in the contract. Common practice: half of retention released on practical completion, the balance after the defect liability period (12 months). Some contracts allow contractors to substitute retention with a bank guarantee — useful for cash-strapped contractors.

TDS

Section 194C of the Income Tax Act applies to works contracts. Standard TDS rates are 1% for individual/HUF contractors and 2% for companies and firms. The builder deducts at source and issues Form 16A quarterly. The contractor adjusts this against advance tax / annual return.

GST

For most works contracts, GST is 18%. Affordable housing projects may attract concessional 1% (without ITC) or 5% (without ITC) — these are output GST rates for builders selling units, not always for contractor RA bills. For pure works contract billing between contractor and builder, 18% with ITC is the typical treatment. Always confirm the right rate for your project type with a CA.

GST TDS

Where the builder is a government entity or notified PSU, GST TDS at 2% may apply on contract values above ₹2.5 lakhs per contract. For private builders, GST TDS does not normally apply.

RA Bill Approval Process — Step by Step

The clean RA bill workflow on a well-run project:

1. Day 1-2 of new month. Contractor's QS prepares the bill from joint measurement records (JMR) signed during the month. RA bill submitted to site office.
2. Day 3-5. Site engineer cross-checks quantities against site. Any disputed line is flagged. Contractor revises if needed.
3. Day 5-8. Builder's QS / PMC consultant verifies rates, deductions, and material recoveries. Suggests final figures.
4. Day 8-10. Builder / project director approves. Bill is signed, stamped, and forwarded to accounts.
5. Day 10-15. Accounts processes payment. TDS challan filed. Payment released by NEFT/RTGS to contractor.
6. Day 15+. Contractor receipts payment, issues GST invoice for the period, files monthly returns.

If joint measurement is not done weekly through the month, this process collapses. The single most useful thing contractors can do is insist on weekly site measurement and a signed measurement book — not waiting until month-end to argue over numbers.

Mistakes That Delay Payment

• Cumulative mismatch. RA-3 cumulative does not match RA-2 plus this period. Painful to debug. Always start from previous cumulative, not from scratch.
• Extra items without approval letter. Builder will reject. Get every change in writing before executing.
• Missing measurement sheets. The bill is the summary. Measurement sheets are the proof. No sheets, no payment.
• Wrong GST treatment. Charging 5% on a contract that is 18% means the contractor eats the difference at audit time.
• Forgetting material issue recovery. If builder supplied steel free, you cannot also charge for steel in the labour-and-material rate. Recovery must be deducted.
• No physical signature trail. Joint measurement signed by site engineer + supervisor for both sides is non-negotiable. Without it, every line is debatable.

Automating RA Bills

The bottleneck on Indian sites is rarely the math — it is the data. Quantities are scattered across measurement books, photos, and supervisor notes. The QS spends 60% of his time pulling numbers together and 40% actually billing.

A platform like Site Setu flips this. The BOQ lives in the system. Daily progress entered through the DPR auto-updates cumulative quantities. At month-end, RA bill is one click — pull cumulative, subtract previous, add extras, apply deductions, generate PDF with signature blocks.

For more on the upstream workflow, see our guides on BOQ in construction and construction project management for Indian builders. To learn how RA bills tie into the broader builder workflow, see our solutions for builders.

FAQs

What is an RA bill in construction?

An RA (Running Account) bill is a periodic bill — usually monthly — raised by a contractor against work completed against the BOQ. It is called "running" because each bill is cumulative: RA-1 + RA-2 + ... is the total work billed to date.

What is retention in an RA bill?

Retention is a percentage of the bill amount (typically 5% or 10%) held back by the builder as security against defects. Half is usually released on project completion and the balance after the defect liability period (typically 12 months).

What deductions are made from an RA bill?

Retention (5-10%), TDS under Section 194C (1% individual / 2% company), GST TDS where applicable, recovery of advances given, recovery of materials issued by builder (cement, steel), penalty for delay, and electricity/water charges if separately metered.

Is GST applicable on RA bills?

Yes. RA bills carry GST at the works contract rate — typically 18% for commercial works contracts. The contractor charges GST on the gross billed amount (before deductions), and the builder claims input tax credit subject to RCM and ITC rules.

How long does RA bill approval take?

On well-run projects, 7-15 days from submission. Manual processes often stretch this to 30-45 days.