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Service Agreement Template for India

Free service agreement template for Indian businesses. Covers GST compliance, TDS provisions, MSME payment terms, IT Act 2000 electronic execution, and Indian arbitration clauses.

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Service Agreement for India

1. Parties and Recitals

This Service Agreement ("Agreement") is executed on [Date] at [City, India] between [Service Provider Name], a [Private Limited Company / LLP / Proprietorship / Partnership] registered under the laws of India, having its registered office at [Address], GSTIN: [GST Number], PAN: [PAN Number] (hereinafter referred to as the "Service Provider"), AND [Client Name], a [entity type] having its registered office at [Address], GSTIN: [GST Number], PAN: [PAN Number] (hereinafter referred to as the "Client").

2. Scope of Services

The Service Provider shall render the services described in Schedule A (the "Services") in accordance with the specifications, timelines, and quality standards set forth therein. The Service Provider shall deploy qualified personnel and use industry-standard tools and methodologies. Any change in scope shall be documented through a Change Request Form signed by both Parties. The Service Provider shall comply with all applicable Indian laws, including the Information Technology Act, 2000 for any digital services.

3. Fees, GST, and TDS

The Client shall pay the Service Provider fees as detailed in Schedule B. All fees are exclusive of Goods and Services Tax (GST), which shall be charged at the applicable rate (currently [18%] for most services under SAC [9983/9984/relevant code]). The Service Provider shall issue GST-compliant tax invoices. The Client shall deduct Tax at Source (TDS) as applicable under Section 194J/194C of the Income Tax Act, 1961, and provide TDS certificates (Form 16A) quarterly. Payment shall be made within [30] days of invoice via NEFT/RTGS/UPI to the bank account specified.

4. MSME Compliance and Payment Terms

If the Service Provider is registered as a Micro, Small, or Medium Enterprise (MSME) under the MSMED Act, 2006 (Udyam Registration Number: [Number]), the Client shall make payment within [45] days of acceptance of goods/services as mandated by Section 15 of the MSMED Act. Failure to pay within [45] days shall attract compound interest at three times the bank rate notified by the Reserve Bank of India. The Service Provider shall furnish its Udyam Registration certificate if applicable.

5. Intellectual Property and Data Protection

All intellectual property created in performing the Services shall vest with the Client upon full payment. Pre-existing IP of the Service Provider shall remain with the Service Provider, with a license granted to the Client. Both Parties shall comply with the Information Technology Act, 2000, the Digital Personal Data Protection Act, 2023, and the IT (Reasonable Security Practices and Procedures) Rules, 2011 with respect to any personal data processed under this Agreement.

6. Dispute Resolution and Governing Law

This Agreement shall be governed by the laws of India. Any dispute arising out of this Agreement shall be first attempted to be resolved through mediation. If mediation fails within [30] days, the dispute shall be referred to arbitration under the Arbitration and Conciliation Act, 1996, with the seat of arbitration at [City, India]. The arbitration shall be conducted in English by a sole arbitrator mutually appointed. The courts at [City] shall have supervisory jurisdiction over the arbitration proceedings.

Signature — Party A

Signature — Party B

Tips for Using This Template

  • Always verify the service provider's GSTIN on the GST portal before entering into the agreement to ensure valid input tax credit.
  • MSME registered vendors have statutory protection for payment within 45 days - non-compliance attracts penal interest.
  • Ensure proper SAC (Service Accounting Code) classification for GST purposes to apply the correct tax rate.
  • For IT/software services, check if the service qualifies for TDS under Section 194J (professional/technical) or 194C (contractual).

Frequently Asked Questions

Is GST applicable on all service agreements in India?
Most services attract GST at 18% under the applicable SAC code. Some services are exempt (healthcare, education) or taxed at different rates (5% for transport, 12% for certain construction). Verify the applicable rate for your specific service category on the CBIC website.
What TDS rate applies to service agreements?
TDS on professional/technical services is 10% under Section 194J. TDS on contractual payments is 1-2% under Section 194C. The applicable section depends on the nature of the services. If the service provider is an individual/HUF with turnover below the threshold, TDS may not apply.
Can this service agreement be executed electronically?
Yes, electronic contracts are valid under Section 10A of the Information Technology Act, 2000. Electronic signatures (including Aadhaar eSign) are recognized under Section 5 of the IT Act. ContractClaw Sign provides IT Act compliant electronic execution.

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Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction. Consult a qualified legal professional before using this document for any binding agreement. ContractClaw Sign is not a law firm and does not provide legal services.

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