Vendor / Service Agreement

Client's name*

Client's address*

Vendor / service provider's name*

Vendor's address*

Vendor's GSTIN

Scope of services / deliverables*

Contract value (Rs.)*

Payment terms (e.g. 30 days from invoice)

Start date*

Term (months)

Termination notice (days)

Who owns the work product?

Liability cap as a multiple of fees paid

City whose courts will have jurisdiction

Effective date*

State*

Format:

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SERVICE AGREEMENT This SERVICE AGREEMENT is made on [effective_date] BETWEEN [client_name], having its place of business at [client_address] (the "Client"); AND [vendor_name], having its place of business at [vendor_address] (the "Service Provider"). Service Provider's GSTIN: [vendor_gstin] 1. SCOPE OF SERVICES 1.1 The Service Provider shall render the following services to the Client (the "Services"): [scope_of_services] 1.2 Any work outside the above scope shall be treated as a change request, and shall be performed only on written agreement of scope, timelines and additional fees. 2. TERM 2.1 This Agreement commences on [start_date] and continues for the term stated below, unless renewed by written agreement or terminated earlier under Clause 9. If no term is stated, it continues until terminated under Clause 9. Term (months): [term_months] 3. FEES, TAXES AND PAYMENT 3.1 The Client shall pay the Service Provider fees of Rs. [contract_value] for the Services. 3.2 Payment terms (if none are stated, within thirty days of receipt of a valid invoice): [payment_terms] 3.3 All fees are exclusive of Goods and Services Tax, which shall be charged additionally at the applicable rate. The Service Provider shall raise a tax invoice compliant with the Central Goods and Services Tax Act, 2017 and the rules made thereunder. 3.4 The Client shall be entitled to deduct tax at source at the rate applicable under the income-tax law in force, and shall furnish the Service Provider with a certificate of such deduction. 3.5 Undisputed invoices not paid by the due date shall carry interest at the rate agreed between the parties, without prejudice to the Service Provider's other remedies. 4. OBLIGATIONS OF THE SERVICE PROVIDER 4.1 To perform the Services with reasonable skill, care and diligence, and in accordance with good industry practice; 4.2 To comply with all applicable laws, and to hold and maintain all licences, registrations and permissions necessary to render the Services; 4.3 To provide personnel with appropriate skill and experience, and to replace any personnel the Client reasonably objects to; 4.4 To keep the Client reasonably informed of progress and of any circumstance likely to affect delivery. 5. OBLIGATIONS OF THE CLIENT 5.1 To provide, in a timely manner, such information, access, materials and approvals as the Service Provider reasonably requires; 5.2 To pay the fees when due; 5.3 To designate a representative authorised to give instructions and approvals. 6. INTELLECTUAL PROPERTY 6.1 Ownership of the deliverables shall be as stated below or, if nothing is stated, the Client shall own all deliverables created specifically for it under this Agreement. Ownership of deliverables: [ip_ownership] 6.2 Where the Client owns the deliverables, the Service Provider assigns to the Client, on receipt of full payment, all right, title and interest in the deliverables created specifically for the Client under this Agreement, and shall execute such documents as may be required to give effect to that assignment. 6.3 Each party retains ownership of its pre-existing intellectual property. Where the Service Provider incorporates its pre-existing material into a deliverable, it grants the Client a perpetual, non-exclusive, royalty-free licence to use that material as part of the deliverable. 7. CONFIDENTIALITY Each party shall keep confidential all non-public information of the other received in connection with this Agreement, use it only for the purposes of this Agreement, and not disclose it to third parties save to those who need it and are bound by equivalent obligations. This clause survives termination for three years. 8. INDEPENDENT CONTRACTOR The Service Provider is an independent contractor. Nothing in this Agreement creates a relationship of employer and employee, partnership, joint venture or agency. The Service Provider is solely responsible for the statutory dues, taxes and benefits of its own personnel. 9. TERMINATION 9.1 Either party may terminate this Agreement for convenience by giving written notice of the number of days stated below (or thirty days, if none is stated). Notice period (days): [notice_days] 9.2 Either party may terminate immediately by written notice if the other: (a) commits a material breach which is not remedied within thirty days of written notice requiring remedy; (b) becomes insolvent, or has an insolvency or winding-up proceeding commenced against it; or (c) is prevented by force majeure from performing for more than sixty consecutive days. 9.3 On termination, the Client shall pay for all Services properly rendered up to the date of termination, and each party shall return or destroy the other's confidential information. 10. LIMITATION OF LIABILITY 10.1 Neither party shall be liable to the other for any indirect, incidental, special or consequential loss, or for loss of profit, revenue, business, goodwill or anticipated savings, however arising. 10.2 The aggregate liability of either party under this Agreement shall not exceed the multiple stated below (or one, if none is stated) of the total fees paid or payable under this Agreement in the twelve months preceding the event giving rise to the claim. Liability cap (multiple of such fees): [liability_cap_multiple] 10.3 Nothing in this clause limits liability for fraud, wilful misconduct, breach of confidentiality, or any liability which cannot lawfully be limited. 11. INDEMNITY The Service Provider shall indemnify the Client against claims arising from the Service Provider's breach of this Agreement, its negligence, or any allegation that the deliverables infringe a third party's intellectual property rights, save to the extent arising from materials supplied by the Client. 12. FORCE MAJEURE Neither party shall be liable for failure or delay in performance caused by an event beyond its reasonable control, including act of God, natural disaster, epidemic, war, civil unrest, strike, or governmental restriction. The affected party shall notify the other promptly and use reasonable efforts to mitigate. 13. GOVERNING LAW AND DISPUTE RESOLUTION 13.1 This Agreement is governed by the laws of India. 13.2 Any dispute shall be referred to arbitration by a sole arbitrator appointed by mutual consent, in accordance with the Arbitration and Conciliation Act, 1996, seated at the city stated below or, if none is stated, at the city of the Client's place of business, proceedings in English. Seat of arbitration: [jurisdiction_city] 13.3 Subject to the above, the courts at the seat of arbitration shall have exclusive jurisdiction. 14. GENERAL 14.1 This Agreement is the entire agreement between the parties on its subject matter. 14.2 No variation is effective unless in writing and signed by both parties. 14.3 Neither party may assign this Agreement without the other's prior written consent, such consent not to be unreasonably withheld. 14.4 If any provision is held invalid, the remainder continues in force. 14.5 Notices shall be in writing and sent to the addresses stated above. IN WITNESS WHEREOF the parties have executed this Agreement on the date first written above. FOR THE CLIENT FOR THE SERVICE PROVIDER [client_name] [vendor_name] Name: Name: Designation: Designation:

Vendor / Service Agreement: what it is

A Vendor or Service Agreement sets out the terms on which a business hires an outside provider for ongoing services: what work is done, for how long, at what price, and what happens if things go wrong. It covers GST invoicing, tax deduction at source, ownership of deliverables, liability limits and termination.

When you need this document

You are outsourcing housekeeping, security, IT support, digital marketing or accounting to an outside firm.
A company is onboarding a new vendor and procurement needs a signed contract before raising purchase orders.
A service provider wants written payment terms and a cap on its liability before starting work.
Software, designs or content will be created for you and you need clarity on who owns them.

What it covers

Scope of services, with any extra work handled as a written change request.
Term in months, contract value, payment terms, GST charged extra on a compliant tax invoice, and TDS deducted by the client with a certificate.
Duties of each side, including the provider's compliance with law and the client's duty to give access and approvals.
Ownership of deliverables as chosen, assignment to the client on full payment where the client owns them, and a licence of the provider's pre-existing material.
Three years' confidentiality, independent contractor status, and termination for convenience on the agreed notice or immediately for uncured breach, insolvency or long force majeure.
Exclusion of indirect loss, a liability cap linked to twelve months' fees, an indemnity from the provider, and arbitration in the chosen city.

How to fill, sign and use it

Write the scope as a list of measurable deliverables or service levels, so payment and performance can be checked.
Fill in the form on this page, including the vendor's GSTIN, payment period and notice days, and check the preview.
Confirm with your accountant the GST rate and the TDS section that applies to these services.
Print on stamp paper or pay e-stamp duty as an agreement under your state's stamp law.
Have authorised signatories of both businesses sign with names and designations.
Issue purchase orders and invoices that refer to this agreement, and keep delivery records and approvals for every billing cycle.

Documents to attach or keep with it

Vendor's GST registration certificate and PAN.
Udyam registration certificate, if the vendor is a micro, small or medium enterprise.
Statement of work, rate card or service level schedule.
Authority letter or board resolution for each signatory.

The law behind it

The contract is governed by the Indian Contract Act, 1872. GST invoicing follows the Central Goods and Services Tax Act, 2017, and the client deducts tax at source under income tax law. If the vendor is a micro or small enterprise registered under the MSMED Act, 2006, payment cannot be delayed beyond the agreed date, and the agreed period cannot exceed 45 days; late payment attracts compound interest under that Act. Where the vendor's staff work at your premises, applicable labour law may impose duties on you too.

Common mistakes to avoid

A vague scope such as 'IT support as required', which leads to fights over what the fee covers.
Agreeing a payment period longer than 45 days with a registered micro or small enterprise vendor.
Not checking the vendor's GSTIN, so input tax credit is lost when the vendor does not file returns.
Choosing vendor ownership of deliverables without thinking about what the client needs to use after the contract ends.

Vendor / Service Agreement: frequently asked questions

Is a service agreement required to be on stamp paper?

Yes, in most states it is stamped as an agreement, and the duty is set by the state. It can be paid by e-stamping where available. An unstamped agreement is not void, but it may not be admitted in evidence until duty and penalty are paid, which matters if a dispute reaches court or arbitration.

Who pays GST under a vendor agreement?

The vendor charges GST on its invoice at the applicable rate and the client pays it along with the fee, as this draft provides. The vendor deposits it with the government. The client can usually claim input tax credit if the vendor has filed its returns correctly and the services are used for business.

What TDS applies to payments under a service contract?

It depends on the nature of the work. Contract work and professional or technical services fall under different TDS provisions with different rates. The client deducts tax and issues a certificate, as Clause 3.4 requires. Ask your accountant to confirm the provision for your specific services.

Can I terminate a vendor agreement early?

Under this draft, either party can end it for convenience by giving the agreed number of days' written notice. Immediate termination is allowed for a material breach not cured within thirty days, insolvency, or force majeure lasting over sixty days. The client must still pay for services properly delivered up to termination.

Last updated 11 October 2026.

General information on Indian law, not legal advice for your situation. Stamp duty, registration and fees differ by state, so check with the local office or an advocate before you rely on it.

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