Free Service Agreement Template for India
Define the scope, payment terms, and obligations for any service engagement in India with a legally sound Service Agreement. Our template addresses GST at 18%, intellectual property ownership, and dispute resolution under Indian law.
Design, development and deployment of a cloud-based enterprise resource planning (ERP) module for inventory and logistics management. Deliverables include: functional specification document, backend API development (Node.js), frontend dashboard (React), database schema (PostgreSQL), unit test coverage ≥80%, UAT support and go-live deployment on AWS.
The Service Provider shall commence the Services on 1 May 2026 and the engagement shall continue for 6 months. The Service Provider shall perform the Services in a professional and workmanlike manner in accordance with applicable industry standards. The Client shall provide all necessary information, access, and cooperation required by the Service Provider to deliver the Services (ICA 1872 s. 10 — essentials of a valid contract; s. 51 — reciprocal obligations).
Each Party shall keep confidential all non-public information disclosed by the other Party in connection with this Agreement and shall not disclose such information to any third party without prior written consent. This obligation shall survive termination or expiry of this Agreement for a period of 24 months. Where personal data is involved, the confidentiality obligation is supplemented by the obligations under DPDPA 2023 described below.
Indemnification: Each Party shall indemnify and hold harmless the other against third-party claims arising directly from its own breach, fraud, gross negligence or wilful misconduct.
Dispute Resolution: Any dispute, controversy, or claim arising out of or in connection with this Agreement shall be finally resolved by arbitration in accordance with the Arbitration and Conciliation Act, 1996 ("ACA 1996"). The seat and venue of arbitration shall be Mumbai, Maharashtra. The arbitration shall be conducted in English by a sole arbitrator. The award shall be final, binding, and enforceable under Part I of ACA 1996. Either Party may seek urgent interim relief from a court of competent jurisdiction under ACA 1996 s. 9.
What Is a Service Agreement in India?
A Service Agreement is a legally binding contract between a service provider and a client that governs the terms under which services will be provided. In India, service agreements are used across all industries — from IT services and consulting to marketing, construction, event management, and professional services. The agreement specifies the scope of work, timelines, fees, payment schedules, intellectual property rights, and the consequences of non-performance.
Indian businesses increasingly rely on formal service agreements to manage risk, set clear expectations, and protect both parties in the event of a dispute. A well-drafted service agreement reduces ambiguity about deliverables and payment obligations, which are common sources of commercial disputes in India. It also addresses applicable taxes — including the Goods and Services Tax (GST) under the Central Goods and Services Tax Act 2017, which applies at 18% on most professional and business services in India.
Under Indian law, service agreements are enforceable contracts under the Indian Contract Act 1872. They must satisfy the essential elements of a valid contract — offer, acceptance, consideration, free consent, competent parties, and a lawful object. The IT Act 2000 permits electronic execution of service agreements. Where the service involves personal data, the Digital Personal Data Protection Act 2023 (DPDPA) imposes additional obligations on both data fiduciaries and data processors operating in India. Disputes may be resolved through Indian courts or, more efficiently, through arbitration under the Arbitration and Conciliation Act 1996.
What's Covered in This Service Agreement Template
Our India-specific Service Agreement template includes all essential clauses for a professional engagement under Indian law.
Parties & Engagement Details
Identifies the service provider and client with full legal names, registered addresses, GST Identification Numbers (GSTIN), and PAN where applicable.
Scope of Services
Defines precisely what services are to be provided, including any deliverables, milestones, and performance standards expected by the client.
Fees & Payment Terms
Sets out the service fee in Indian Rupees (₹), payment schedule, GST at the applicable rate, late payment interest, and invoicing requirements.
Term & Renewal
Specifies the start date, end date, and any provisions for renewal or extension of the service engagement.
Intellectual Property Ownership
Addresses ownership of work product, software, designs, or other IP created during the engagement — distinguishing between pre-existing IP and newly created work.
Confidentiality
Protects confidential information exchanged during the engagement, with obligations aligned with the DPDPA 2023 where personal data is processed.
Representations & Warranties
Includes warranties from both parties — the service provider warrants professional quality of services; the client warrants timely payment and cooperation.
Limitation of Liability
Caps the maximum liability of each party to the fees paid under the agreement, protecting both sides from disproportionate claims.
Termination
Sets out rights to terminate for convenience (with notice) or for cause (e.g., material breach, insolvency), along with consequences of termination including payment for work completed.
Independent Contractor Status
Clarifies that the service provider is an independent contractor, not an employee, avoiding Provident Fund, ESI, and other statutory employment obligations under Indian labour law.
Governing Law & Jurisdiction
Specifies Indian law as the governing law and designates a specific Indian court or arbitral tribunal for dispute resolution.
Dispute Resolution & Arbitration
Includes a structured dispute resolution process — escalation to senior management, followed by arbitration under the Arbitration and Conciliation Act 1996.
How to Create a Service Agreement in India
Follow these steps to prepare a professionally drafted Service Agreement that complies with Indian law.
- 1
Identify the Parties
Include the full legal names, registered office addresses, GSTINs, and PANs of both the service provider and the client. For companies, note the CIN and the authorised signatory.
- 2
Define the Scope of Services
Be as specific as possible about the services to be provided, deliverables, timelines, and quality standards. Ambiguity about scope is the most common cause of service disputes in India.
- 3
Set Fees, GST & Payment Terms
Specify the total fee in ₹, GST at the applicable rate (typically 18% for most services under CGST Act 2017), payment milestones, and the mode of payment. Address TDS deduction obligations under the Income Tax Act 1961 if applicable.
- 4
Address IP and Confidentiality
Clearly state who owns the work product. Include a robust confidentiality clause, and where personal data is processed, ensure the agreement complies with DPDPA 2023.
- 5
Execute on Stamp Paper
Print and execute the agreement on non-judicial stamp paper of the appropriate denomination under the Indian Stamp Act 1899. Both parties should retain a fully signed original.
Legal Considerations for Service Agreements in India
Be aware of these important Indian legal requirements when entering a service agreement.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified Indian advocate or legal practitioner for advice specific to your situation.
Reviewed for Indian law
GST on Services in India
Under the Central Goods and Services Tax Act 2017 and the Integrated Goods and Services Tax Act 2017, most professional and business services attract GST at 18%. Service providers with an annual turnover above the GST registration threshold must register, charge, and remit GST. The service agreement should clearly state whether the quoted fee is inclusive or exclusive of GST and include the GSTIN of both parties.
TDS Deduction Requirements
Under the Income Tax Act 1961, certain payments to service providers (including professional fees, technical services, and managerial services) are subject to Tax Deducted at Source (TDS). The client is typically required to deduct TDS at the applicable rate and deposit it with the government. The service agreement should address TDS obligations and the issuance of Form 16A or Form 26AS credit.
Independent Contractor vs Employee
Misclassification of an independent contractor as an employee can expose a business to significant liability under Indian labour law, including obligations under the Employees' Provident Funds and Miscellaneous Provisions Act 1952 and the Employees' State Insurance Act 1948. The service agreement should expressly state the independent contractor relationship and avoid creating employment-like terms (fixed hours, exclusive service, equipment provision).
DPDPA 2023 Data Processing Obligations
Where the service involves processing personal data of Indian residents, both parties must comply with the Digital Personal Data Protection Act 2023. The service agreement should include a data processing addendum or relevant clauses addressing lawful purpose, data security, retention, and the rights of data principals.
Frequently Asked Questions
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