Running bills, the measurement book and deductions
How a Karnataka works bill is made: measurements recorded in the MB by the engineer, check-measurement, the RA bill, and every deduction taken from it (security deposit recovery, income tax TDS, GST TDS, labour cess, royalty, and recoveries). With a calculator that shows your net receipt.
In this module
Nothing in a works contract is paid because you say it is done. It is paid because an engineer measured it, wrote the measurement in a book, and another engineer checked it. Understanding that book is understanding your cash flow.
The measurement book
The {{measurement-book|MB}} is the department's numbered record of the work executed, item by item, with dimensions and quantities, recorded on site by the section engineer (AE or JE) and check-measured by a superior (the AEE or EE) for a sample or the whole. Every quantity in a bill traces to an MB page. Your job is to have the work ready and measurable, to be present when it is measured, and to keep your own parallel record; disputes at the final bill are settled from the MB, and a measurement you did not witness is hard to contest.
The running account bill
An {{ra-bill|RA bill}} is raised at intervals (monthly, or at value milestones the contract sets) for the work measured since the last bill: quantity times your rate, item by item, cumulative to date, minus what was paid last time. The division's accounts wing checks it, applies the deductions, and passes it for payment through the treasury. The standard documents say the employer pays within 60 days of the bill's submission; a Finance Department order of June 2025 softened that to "as far as possible" within 60 days, and made payment for progress beyond the agreed programme subject to the availability of grants. In practice: a few weeks in a division with funds, longer at financial-year end, and open-ended when the work's budget line is exhausted.
The deductions
| Deduction | Rate | Where it goes | Comes back? |
|---|---|---|---|
| Security deposit recovery | 5% of each bill in a reserved tender; nothing in an open tender, where the 5% was furnished at agreement | Held by the department | Yes, after the DLP |
| Income tax TDS (section 194C) | 1% for an individual or HUF; 2% for a firm or company | Credited to your PAN | Yes, as tax credit when you file |
| GST TDS (section 51 CGST) | 2% (1% CGST + 1% SGST) on the taxable value, contracts above ₹2.5 lakh | Credited to your GSTIN | Yes, as cash ledger credit in GST |
| Labour welfare cess (BOCW) | 1% of the cost of construction | Paid to the construction workers' welfare board | No |
| Royalty / seigniorage | Per the Mines department's rates on sand, stone, earth | Recovered unless you show receipts | No; avoid by paying the quarry and producing receipts |
| Other recoveries | Advances, water/electricity supplied by the department, penalties, LD | As applicable | Depends |
| Line | Amount | Kind |
|---|---|---|
| Taxable value of work | ₹10,00,000 | earned |
| + GST 18% (paid to you, remitted by you) | ₹1,80,000 | pass-through |
| − Security deposit recovery | ₹0 | back after DLP |
| − Income tax TDS (194C, 2%) | ₹20,000 | credit in 26AS |
| − GST TDS (section 51, 2%) | ₹20,000 | credit in GST ledger |
| − Labour welfare cess (1%) | ₹10,000 | cost |
Reading a bill statement
A passed bill comes with a statement: gross value of work done to date, less previous payments, equals this bill; plus GST; less each deduction; equals net payable. Reconcile it against your own measurement record and your GST and income tax portals within the month. The TDS credits appear in your Form 26AS and your GST cash ledger; if a credit is missing, the division has deducted but not deposited, and it is your money.
Extra items and deviations
Work the BOQ did not foresee (rock where soil was assumed, an extra culvert) is an extra item, priced from the SR or by analysis and sanctioned by the competent authority before it is paid. A change in quantity beyond the permitted deviation (often 25% per item) needs a deviation statement and sanction. Do the work only after written instruction, and get the rate agreed before, not after. Module 5, Chapter 4 covers the paperwork.
Key takeaways
- Nothing is paid that is not measured in the MB and check-measured. Witness measurements and keep your own record.
- RA bills pay quantity × rate for work since the last bill, after deductions.
- TDS (1 or 2%) and GST TDS (2%) come back as credits; cess (1%) and royalty do not; deposit recovery returns after the DLP.
- A passed bill is not a paid bill; funds can run out. Ask how the work is funded before you sign.
Check yourself
0 / 3- 1.What is the measurement book?
- 2.Which deduction is not recovered later by the contractor?
- 3.A firm's ₹10 lakh bill (taxable value) is passed. What income tax TDS is deducted?
Frequently asked
What deductions are made from a contractor's running bill in Karnataka?
How often are running bills paid?
What is check-measurement?
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Written from the KTPP Act and Rules, the Karnataka Public Works Departmental Code 2014, KPWD bidding documents and office checklists, and checked against awarded tenders on this site. Figures change; the tender document and the registering office are the final word. Spotted an error? Tell us.