# Master Services Agreement, SOW & SLA

> A master services agreement sets the legal terms for an ongoing client relationship — payment, IP, confidentiality, warranties, liability caps, data protection and termination — while each project is described in a short statement of work. A service level agreement adds measurable commitments such as uptime or response times, with credits if they are missed. Together they avoid renegotiating legal terms for every project.

Practice: Legal Documents & Agreements — https://www.industax.com/services/legal-documents/

For Indian IT and SaaS companies selling abroad, the MSA also settles governing law and dispute resolution (often arbitration), currency and taxes — including that payments are made net of foreign withholding, which you then claim as foreign tax credit.

We draft from the supplier's or the client's side, with liability caps tied to fees, carve-outs for confidentiality and IP infringement, and data-processing terms that anticipate the DPDP Act obligations from 2027.

## Key facts

| Item | Detail |
| --- | --- |
| Structure | MSA + SOWs + SLA |
| Key risk clauses | Liability cap, indemnity, IP, data protection |
| Cross-border | Governing law, arbitration, withholding tax |
| Exports of services | Zero-rated GST under LUT |

## Who needs this

- IT services and SaaS companies
- Agencies and consultancies
- Businesses outsourcing services

## What's included

- MSA, SOW and SLA drafting
- Redlining of client paper
- Tax and FEMA review of payment terms
- Negotiation support

## Documents

- Service description
- Pricing model
- Client's draft (if any)

## Process

1. **Map** — Services, risks and pricing understood.
2. **Draft** — MSA, SOW and SLA prepared or redlined.
3. **Close** — Negotiated and signed.

## FAQs

### What liability cap is normal in an MSA?

Commonly the fees paid in the 12 months before the claim, with exceptions for confidentiality breaches, IP infringement and wilful misconduct. The right cap depends on the risk and your insurance.

### Should Indian companies accept foreign governing law?

It is common with large clients. The key is a workable dispute mechanism — arbitration seated in a neutral venue is often easier to enforce than foreign court judgments.

### Do I need an LUT for export of services under an MSA?

Yes, to export without paying IGST. Otherwise pay IGST and claim a refund.

## Official sources

- India Code — central Acts: https://www.indiacode.nic.in/

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Canonical page: https://www.industax.com/services/legal-documents/service-agreement-msa
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.