What an RA bill is
A running-account bill — universally shortened to RA bill — is how contractors in India get paid during a project rather than only at the end. Instead of one final invoice, the contractor raises a series of bills against work completed to date: RA-1, RA-2, RA-3 and so on, each measuring the cumulative work done, subtracting what was billed in the previous bills, and claiming the difference. Retention is held back on each, mobilisation advance is recovered in stages, and a final bill closes the account. It is the standard billing rhythm of construction, EPC and infrastructure work across the country, and it is completely foreign to the global project tools that only know how to raise one invoice per project.
The problem RA billing creates is that the claim must be defensible. A client or a project management consultant will check that the quantities billed match the measured work, that retention and advance recovery are correct, and that GST is applied properly. That is only possible when the bill is built from the same tasks and resources the work was planned and executed against — which is exactly what project software with a Bill of Resources gives you.
How Fast Project raises RA and milestone bills
Fast Project is built for this. Because every project bill is resource-itemised and keyed to tasks, the same data that planned and executed the work can be sliced to bill it three ways — by project, by resource consumed, or by milestone or progress stage. A project bill header carries the bill number and date, the project, the party being billed with its address, notes and the amount; its lines carry, per task, the resource group, resource code and name, quantity, unit, rate and amount. That is precisely the structure an RA or progress bill needs.
Because it all rides one engine, a Fast Project RA bill traces back to the exact tasks and resources behind it — see Project & Milestone Billing. The sections below explain the Indian conventions that structure has to satisfy. None of it is tax advice: works-contract GST is nuanced and rate notifications change, so confirm the treatment of your specific contracts with your CA.
Running-account billing conventions
An RA bill follows a consistent arithmetic that every quantity surveyor and billing engineer in India recognises:
- Cumulative measurement. Each RA bill states the total quantity of each item executed up to date, taken from measurement of the work.
- Less previous. The quantity and value already billed in earlier RA bills is subtracted, so the current bill claims only the increment since the last one.
- Retention held back. A contractual percentage — often five to ten percent — is retained on each bill as security, released after completion or the defect-liability period.
- Advance recovery. Mobilisation or material advances paid at the start are recovered in instalments across the RA bills.
- Final bill. The last bill in the series settles the account, releases retention as due, and reconciles all advances.
Milestone billing is a close cousin: instead of measured quantities, the trigger is a defined stage — design sign-off, foundation complete, structure up, commissioning — each releasing an agreed portion of the contract value. An engineer-to-order machine is often billed this way, while a civil contractor bills by RA measurement; the software has to support both, which is why Fast Project bills by project, resource and milestone.
What an RA bill contains
Whatever the client's template, an RA bill carries the same skeleton of information — and each element maps to a field the software already holds:
| RA bill element | What it shows | Source in project software |
|---|---|---|
| Bill header | RA number, date, project, contractor and client with address | Project bill header — bill no, date, project, party and address |
| Item / task lines | Each work item with unit, rate and cumulative quantity | Bill lines by task and resource group, code, unit and rate |
| Up-to-date value | Cumulative quantity × rate for each item | Resource lines rolled up from the Bill of Resources |
| Less previous bill | Value certified in earlier RA bills | Prior project bills against the same project |
| Deductions | Retention, advance recovery, GST TDS | Applied on the bill amount per contract and statute |
| GST | Works-contract GST on the taxable value | Tax applied at the works-contract rate; e-invoice as applicable |
| Net payable | Amount actually due this bill | Header amount after deductions |
GST on works contracts: SAC 9954 at 18%
Under GST, a works contract — a contract for building, construction, fabrication, erection, installation, fitting-out, improvement or commissioning of immovable property where both goods and services are supplied — is treated as a supply of service. That single classification is what makes works-contract billing different from selling goods: you do not split the bill into material and labour with separate rates; the whole composite supply is a service.
Works-contract services fall under SAC 9954, and the general rate is 18% GST (nine percent CGST plus nine percent SGST for intra-state, or eighteen percent IGST inter-state). Certain categories — some government, infrastructure, affordable-housing and specified works — have historically attracted concessional rates such as twelve or five percent, and these are periodically revised by notification. Because the correct SAC sub-classification and rate depend on the nature of the contract and the client, this is a question for your CA on each contract, not a fixed number to hard-code.
GST TDS at 2% and retention
Two deductions routinely appear on RA bills and both must be handled correctly:
GST TDS. Under Section 51 of the CGST Act, notified deductors — typically government departments, PSUs, local authorities and certain notified entities — must deduct GST TDS at 2% (one percent CGST plus one percent SGST, or two percent IGST) on the taxable value of a supply under a contract where that value exceeds two and a half lakh rupees. This is separate from income-tax TDS. The deducted amount is reflected in the deductee's electronic cash ledger and is claimed accordingly. Whether it applies to a given bill depends on who the client is — a private client is generally not a GST-TDS deductor — so the software must be able to apply it selectively.
Retention. Retention money held back on an RA bill is a contractual security, not a discount, and its GST treatment needs care — the timing of tax on retained amounts and its later release should be handled as your CA advises. The practical requirement for the software is simply that it can compute and show retention on each bill and track the cumulative amount held so the final bill releases the right figure.
Subcontractor bill passing
Main contractors rarely do everything themselves. Fabrication, electrical, plumbing and specialist works are sublet, and the subcontractor raises his own bills against the main contractor. Subcontractor bill passing is the discipline of receiving those bills, checking them against the subcontractor's purchase order or work order and the measured work, deducting his retention and any recoveries, and passing the approved amount for payment.
Fast Project passes and clears subcontractor bills against a purchase order on the same engine that raises your client RA bills. That matters because it lets you reconcile the two sides: what you certify to your client and what you approve to your subcontractors sit on one system, against the same tasks and the same project, so margin on a sublet package is visible rather than reconstructed at year-end. See how procurement and billing connect in Project & Milestone Billing and the pillar guide on what project management software does.
RA concepts mapped to the software
Pulling it together, here is how the India billing vocabulary lands on Fast Project's structure:
For a fuller picture of pricing this capability, see the India pricing guide, and to see it live on your own contract, book a demo. Treat every rate and deduction here as a prompt to confirm with your CA.
Frequently asked questions
What is an RA bill in construction?
An RA (running-account) bill is a progress bill raised by a contractor during a project rather than only at completion. Each RA bill — RA-1, RA-2 and so on — states the cumulative quantity of work executed to date, subtracts the value billed in previous RA bills, and claims the increment. Retention is held back on each, mobilisation advance is recovered in stages, and a final bill closes the account. It is the standard billing rhythm for construction, EPC and infrastructure work in India.
What GST rate applies to a works contract in India?
A works contract is treated under GST as a supply of service, classified under SAC 9954, and the general rate is 18% (9% CGST plus 9% SGST intra-state, or 18% IGST inter-state). Some government, infrastructure and specified works have historically attracted concessional rates such as 12% or 5%, and these are revised by notification. The correct sub-classification and rate depend on the contract and the client, so confirm the treatment of each contract with your CA.
What is GST TDS at 2% on contractor bills?
Under Section 51 of the CGST Act, notified deductors such as government departments, PSUs and local authorities must deduct GST TDS at 2% — 1% CGST plus 1% SGST, or 2% IGST — on the taxable value of a supply under a contract where that value exceeds two and a half lakh rupees. It is separate from income-tax TDS and is reflected in the deductee's electronic cash ledger. Private clients are generally not GST-TDS deductors, so the software must apply it selectively by client type.
How does project software handle retention on RA bills?
The software computes the contractual retention percentage on each RA bill, deducts it from the amount payable, and tracks the cumulative retention held across the RA series so the final bill releases the correct figure. Retention is a security, not a discount, and its GST timing should be handled as your CA advises. Fast Project applies retention on resource-itemised project bills keyed to tasks.
Can Fast Project raise RA, milestone and subcontractor bills?
Yes. Because every Fast Project bill is resource-itemised and keyed to tasks, the same data can be billed by project, by resource consumed, or by milestone or progress stage — which covers RA and milestone billing. It also passes and clears subcontractor bills against a purchase order on the same engine, so client RA billing and sublet payments reconcile against one project. Works-contract GST and GST TDS are applied on the taxable value per contract and client type.
Do global project management tools handle RA billing and works-contract GST?
Generally no. Global SaaS project tools are built to raise a single invoice per project or to sell items at item rates, and they have no concept of running-account measurement, retention, mobilisation-advance recovery, works-contract SAC codes or GST TDS. Handling these needs India-aware project software where billing is built from the tasks and resources the work was executed against.