Maintenance Services Contract (Pakistan)
MAINTENANCE SERVICES CONTRACT
Governed by the Contract Act 1872 | Income Tax Ordinance 2001 | Provincial Sales Tax on Services Laws
This Maintenance Services Contract (the 'Contract') is entered into at [Contract City], Pakistan, on [Contract Date], between:
SERVICE PROVIDER: [Service Provider Name], of [Service Provider Address], NTN: [Service Provider NTN] (the 'Service Provider'); and
CLIENT: [Client Name], of [Client Address], NTN: [Client NTN] (the 'Client').
The Service Provider and the Client are each a 'Party' and together the 'Parties'.
1. MAINTENANCE SERVICES
1.1 The Service Provider shall provide [Maintenance Type] at the following premises: [Service Location].
1.2 Equipment / assets covered under this Contract: [Equipment Description].
1.3 Preventive Maintenance Schedule: [Preventive Schedule].
1.4 Service Availability: [Service Hours].
2. SERVICE LEVEL AGREEMENT
2.1 Critical Fault Response Time: The Service Provider shall arrive on-site within [Critical Response Hours] hours of a critical fault report being logged by the Client.
2.2 Major Fault Response Time: The Service Provider shall respond to major faults within [Major Response Hours] hours.
2.3 Minor Fault Response Time: The Service Provider shall respond to minor faults within [Minor Response Hours] hours.
2.4 Failure to meet SLA response times shall entitle the Client to claim damages under Section 73 of the Contract Act 1872 for any loss arising from the delay. Persistent SLA failures may constitute a material breach entitling the Client to terminate this Contract on written notice.
3. SERVICE FEES AND PAYMENT
3.1 Annual Service Fee: [Annual Service Fee], exclusive of applicable provincial sales tax on services.
3.2 Payment Frequency: [Payment Frequency].
3.3 Spare Parts: [Spare Parts Arrangement].
3.4 Annual Escalation: The service fee shall be subject to annual escalation of [Annual Escalation] at the commencement of each contract year.
3.5 Tax: The Client shall deduct withholding income tax at the applicable rate under Section 153 of the Income Tax Ordinance 2001 (7% for filers, 14% for non-filers) from each payment and shall issue a tax deduction certificate to the Service Provider. Provincial sales tax on services shall be charged by the Service Provider at the applicable rate and is payable by the Client in addition to the stated service fee.
4. CONTRACT PERIOD AND TERMINATION
4.1 This Contract shall commence on [Contract Start Date] and shall remain in force until [Contract End Date], unless earlier terminated in accordance with this Clause 4.
4.2 Either Party may terminate this Contract for convenience by giving [Termination Notice Days] days' written notice to the other Party.
4.3 Either Party may terminate this Contract immediately on written notice if the other Party commits a material breach and fails to remedy it within 14 days of written notice of the breach.
5. GOVERNING LAW AND DISPUTES
This Contract is governed by the laws of Pakistan, including the Contract Act 1872. Any dispute shall be referred to arbitration under the Arbitration Act 1940, seated at [Contract City], Pakistan.
IN WITNESS WHEREOF the Parties have executed this Contract at [Contract City] on [Contract Date].
Service Provider
________________
Signature
Client
________________
Signature
What Is a Maintenance Services Contract (Pakistan)?
A Maintenance Services Contract in Pakistan is a formal written agreement between a service provider and a client under which the service provider undertakes to perform maintenance, repair, inspection, and upkeep services for specified equipment, plant, buildings, or infrastructure owned or operated by the client, in exchange for a service fee. The Maintenance Services Contract (Pakistan) is primarily governed by the Contract Act 1872, which codifies the law of contracts in Pakistan and determines the obligations, rights, and remedies of both parties throughout the contract period.
Under Section 10 of the Contract Act 1872, a Maintenance Services Contract is enforceable as a binding agreement when it is made by free consent of parties competent to contract, for a lawful consideration and with a lawful object, and not expressly declared to be void. The service provider's obligation to perform maintenance work is a promise that, if breached, gives the client a right to claim damages under Section 73 of the Contract Act 1872 for any loss or damage directly resulting from the breach, plus any penalty agreed in the contract under Section 74.
Maintenance Services Contracts in Pakistan span multiple sectors and service categories. In the building and construction sector, maintenance contracts govern the upkeep of commercial properties, residential housing schemes, factories, and government buildings — subject to any applicable building regulations under provincial building codes administered by the relevant Local Government and Urban Planning departments. In the information technology and telecommunications sector, IT maintenance contracts govern the servicing of hardware, software systems, and network infrastructure — a growing area in Pakistan's technology economy as companies increase investment in digital infrastructure regulated by the Pakistan Telecommunication Authority (PTA) under the Pakistan Telecommunication (Re-organisation) Act 1996. In the industrial sector, equipment maintenance contracts govern the servicing of manufacturing machinery, generators, HVAC systems, and industrial plant — often with reference to the safety standards prescribed by the Factories Act 1934 and provincial factory rules.
For public sector maintenance contracts awarded by government departments, the Public Procurement Regulatory Authority (PPRA) Rules 2004 apply, requiring open competitive bidding above specified thresholds and procurement through the PPRA's online procurement portal (PPRA.org.pk). Public sector maintenance contracts must comply with PPRA's standard bidding documents and include mandatory provisions for performance security, warranty periods, and dispute resolution under the Arbitration Act 1940.
The Maintenance Services Contract must address the tax obligations of both parties under Pakistan's tax laws. Service providers rendering maintenance services are subject to sales tax on services under the respective provincial sales tax on services laws — the Punjab Sales Tax on Services Act 2012, the Sindh Sales Tax on Services Act 2011, the Khyber Pakhtunkhwa Finance Act (service tax provisions), or the Islamabad Capital Territory (Tax on Services) Ordinance 2001. The applicable provincial sales tax rate is typically 16% of the service value, with specific rates for different service categories as listed in the respective provincial schedules. Clients making payments to service providers are also required to withhold income tax at source under Section 153 of the Income Tax Ordinance 2001 — the withholding tax rate for contract payments is 7% for filers and 14% for non-filers of income tax returns with the Federal Board of Revenue (FBR).
When Do You Need a Maintenance Services Contract (Pakistan)?
A Maintenance Services Contract in Pakistan is required whenever a business, property owner, government entity, or individual engages a service provider to perform ongoing maintenance, repair, or inspection services on a regular or as-needed basis.
A Maintenance Services Contract is needed when a commercial building owner in Karachi, Lahore, or Islamabad engages a facilities management company to perform preventive maintenance of HVAC systems, fire safety equipment, elevators, electrical installations, and plumbing — confirming compliance with provincial building codes and fire safety regulations administered by the relevant Civil Defence authorities.
A Maintenance Services Contract is required when a manufacturing company in Pakistan's industrial zones — such as Sundar Industrial Estate in Lahore or Korangi Industrial Area in Karachi — engages a specialist engineering firm for scheduled preventive maintenance and emergency breakdown repair of production machinery, boilers, and generator sets, where unplanned downtime directly impacts production output and revenue.
A Maintenance Services Contract is needed when a Pakistani company or government entity engages an IT services company for the maintenance of computer hardware, enterprise software, network infrastructure, or data centre equipment — particularly where the client's operations depend on high system availability and the service provider must meet defined response time and resolution time targets.
A Maintenance Services Contract is required when a housing scheme developer or cooperative housing society in Pakistan engages a maintenance company for the upkeep of common areas, roads, water supply systems, and security infrastructure across a residential development — with service charges recovered from residents under the housing society's bye-laws.
A Maintenance Services Contract is needed when a public sector entity — a government hospital, university, or municipal authority — must engage a maintenance contractor under PPRA Rules 2004 for the upkeep of public infrastructure, confirming compliance with PPRA's procurement procedures, performance security requirements, and audit requirements of the Auditor General of Pakistan.
A Maintenance Services Contract is required when a company entering a long-term equipment lease or hire-purchase agreement under the Leasing Companies (Establishment and Regulation) Rules 2001 must confirm that the leased equipment is maintained to the lessor's standards throughout the lease period — the maintenance obligations are typically captured in a separate maintenance contract referenced in the lease.
What to Include in Your Maintenance Services Contract (Pakistan)
A valid and commercially effective Maintenance Services Contract in Pakistan under the Contract Act 1872 must contain the following key elements.
Parties and Service Description: The full legal names, addresses, and registration details (SECP registration for companies, NTN from FBR for tax purposes) of both the service provider and the client. A precise description of the maintenance services to be performed — whether building maintenance, equipment servicing, IT support, or other category — with sufficient specificity to define the scope and avoid disputes about what is included.
Scope of Maintenance Services: A detailed Service Level Schedule setting out the specific maintenance tasks, frequency (daily, weekly, monthly, quarterly, annual), and standards to be met. The schedule must distinguish between preventive maintenance (scheduled inspections and servicing to prevent failure), corrective maintenance (reactive repair of failures), and emergency callout response. Vague scope definitions are the most common source of disputes in maintenance contracts under the Contract Act 1872.
Service Level Agreements (SLAs): Defined response time targets and resolution time targets for different categories of fault severity — typically: critical fault (affects core operations) — response within 2–4 hours; major fault — response within 8–24 hours; minor fault — response within 48–72 hours. The SLA provisions must specify how fault categories are classified and what constitutes resolution. Pakistani courts assess breach of SLA obligations under Section 73 of the Contract Act 1872 by reference to whether the client suffered actual damage from the service provider's failure to meet response or resolution times.
Service Fees and Payment Terms: The monthly retainer or annual contract fee, the basis of fee escalation (typically linked to the Consumer Price Index published by the Pakistan Bureau of Statistics or to a fixed annual percentage), the invoicing cycle, and the payment terms. Late payment interest provisions, if any, must be clearly stated — excessive penalty rates may be reduced by Pakistani courts under Section 74 of the Contract Act 1872 as unreasonable penalties.
Tax Obligations: The contract must specify which party bears the applicable provincial sales tax on services (Punjab Sales Tax on Services Act 2012 or equivalent) at the applicable rate (typically 16%), and must address income tax withholding under Section 153 of the Income Tax Ordinance 2001 — the client is required to withhold 7% (filers) or 14% (non-filers) from contract payments and deposit the same with FBR.
Spare Parts and Materials: Whether the cost of spare parts, consumables, and materials used in maintenance is included in the service fee or billed separately. Where parts are billed separately, the pricing mechanism — cost-plus markup, agreed rate schedule, or market price — must be defined to prevent disputes.
Personnel and Subcontracting: The qualifications of the service provider's maintenance personnel, whether the service provider may subcontract maintenance tasks, and the client's right to object to specific subcontractors. For specialist maintenance involving high-voltage electrical work, pressure vessels, or elevators, the maintenance personnel must hold valid certificates from the relevant provincial Labour and Human Resources Department or the Pakistan Engineering Council (PEC) under the Pakistan Engineering Council Act 1976.
Warranty and Liability: A warranty by the service provider that maintenance work will be performed in a workmanlike manner and that repaired equipment will function correctly for a specified period after each service visit. A limitation of liability clause capping the service provider's total liability for breach to an agreed multiple of the annual service fee — typically one to two times the annual fee — protects service providers from disproportionate claims. Pakistani courts recognise limitation of liability clauses under the Contract Act 1872 unless they are unreasonably wide or relate to fraud or wilful default.
Termination: The circumstances in which either party may terminate the contract — including termination for breach (after notice and opportunity to cure), termination for insolvency of the service provider, and termination for convenience (on notice, typically 30 to 90 days). Obligations surviving termination — particularly handover of maintenance records, return of client property, and confidentiality — must be specified.
Forms-legal.com provides this Maintenance Services Contract (Pakistan) template as a practical framework for documenting maintenance arrangements. The template reflects the Contract Act 1872, Income Tax Ordinance 2001, and provincial sales tax on services legislation applicable in Pakistan. Parties with complex maintenance requirements — particularly for regulated industries or PPRA-governed public sector contracts — should engage a qualified Advocate or procurement specialist for bespoke contract drafting.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Maintenance Services Contract (Pakistan) (Pakistan) [Legal document template]. Forms Legal. https://forms-legal.com/pakistan/business/services/maintenance-services-contract-pakistan
"Maintenance Services Contract (Pakistan) (Pakistan)." Forms Legal, 2026, https://forms-legal.com/pakistan/business/services/maintenance-services-contract-pakistan.
@misc{formslegal-maintenance-services-contract-pakistan,
author = {{Forms Legal}},
title = {Maintenance Services Contract (Pakistan) (Pakistan)},
year = {2026},
howpublished = {\url{https://forms-legal.com/pakistan/business/services/maintenance-services-contract-pakistan}},
note = {Free legal document template}
}Frequently Asked Questions
Maintenance services are subject to provincial sales tax on services in Pakistan, not federal sales tax. The applicable tax depends on the province where the service is rendered: in Punjab, the Punjab Revenue Authority (PRA) administers the Punjab Sales Tax on Services Act 2012, with the standard rate of 16% on maintenance services; in Sindh, the Sindh Revenue Board administers the Sindh Sales Tax on Services Act 2011, also at 16%; in Khyber Pakhtunkhwa and Balochistan, analogous provincial tax regimes apply. Service providers registered with the relevant provincial revenue authority must charge the applicable sales tax on their invoices and remit it to the provincial authority on a monthly basis. Clients receiving maintenance services may be entitled to claim input tax credit against their own sales tax liability, depending on whether the client is registered for provincial sales tax purposes. The Federal Board of Revenue (FBR) also levies federal sales tax under the Sales Tax Act 1990 on certain goods supplied as part of maintenance services — for example, spare parts supplied during maintenance work may attract federal sales tax at 17%, separate from provincial services tax on the labour component. Contracts should clearly specify whether the stated service fee is inclusive or exclusive of applicable taxes.
Yes. Payments made by a company or registered business to a maintenance service provider in Pakistan are subject to withholding tax deduction at source under Section 153 of the Income Tax Ordinance 2001. The withholding tax rates for payments for services (which include maintenance contracts) are: 7% if the service provider is a filer on FBR's Active Taxpayers List (ATL), and 14% if the service provider is a non-filer. The withholding agent (the client making the payment) is responsible for deducting the tax at source before making payment, and must deposit the withheld amount with FBR's designated branch of the National Bank of Pakistan by the 15th of the following month. The service provider receives a tax deduction certificate from the client, which they can use to claim credit against their final income tax liability in their annual income tax return. The Maintenance Services Contract should specify that the service fee stated is exclusive of withholding tax, and that the client will deduct withholding tax and provide a tax deduction certificate to the service provider — failure to address this in the contract leads to disputes about whether the stated price is inclusive or exclusive of the withholding tax deduction.
If a maintenance service provider in Pakistan fails to meet the service level agreement (SLA) response or resolution times, the client's remedies depend on the contract terms and the provisions of the Contract Act 1872. Under Section 73 of the Contract Act 1872, the client is entitled to claim compensation for any loss or damage that arose naturally from the breach of the SLA obligation and that the parties knew, at the time of contracting, was the likely consequence of such a breach. However, the client must be able to demonstrate actual financial loss — loss of production, cost of emergency repairs by a third party, spoilage of goods — rather than simply pointing to the SLA breach. Many Maintenance Services Contracts in Pakistan include liquidated damages clauses for SLA failures — a pre-agreed credit or deduction from the service fee for each hour or day of delay beyond the agreed response or resolution time. Pakistani courts generally enforce liquidated damages clauses under Section 74 of the Contract Act 1872 as genuine pre-estimates of loss, provided they are not punitive and disproportionate. Where the SLA failure is persistent and amounts to a material breach, the client may be entitled to terminate the contract under the termination provisions and, if applicable, call on any performance guarantee provided by the service provider.
Whether a maintenance service provider can subcontract its obligations in Pakistan depends on the terms of the Maintenance Services Contract. Under the Contract Act 1872, a party to a contract may generally delegate performance of duties to a subcontractor unless the contract prohibits subcontracting or unless the nature of the obligation requires personal performance. Maintenance services that depend on specific technical expertise, security clearance, or personal trust — such as maintenance of IT security systems, high-security facilities, or medical equipment — are often expressed as non-delegable obligations in the contract. Where subcontracting is permitted, the main service provider remains fully liable to the client for the subcontractor's performance under the principle of vicarious liability — Section 238 of the Contract Act 1872 (dealing with agents' sub-agents) provides relevant principles by analogy. For public sector maintenance contracts governed by PPRA Rules 2004, subcontracting typically requires the procuring entity's prior written approval, and the subcontractor must meet the same technical and financial qualification criteria as the main contractor. The Maintenance Services Contract should specify: whether subcontracting is permitted, whether client approval is required, the service provider's liability for subcontractor performance, and whether the client has a right to audit the subcontractor's qualifications.
The qualification requirements for maintenance engineers in Pakistan depend on the type of maintenance being performed and the applicable regulatory framework. For electrical maintenance work — including high-voltage electrical systems, industrial electrical installations, and power distribution equipment — maintenance personnel must hold valid Wireman Licences or Electrical Contractor Licences issued by the Chief Electrical Inspector under the provincial Electricity Rules (which implement the Electricity Act 1910 and its successor, the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997). For mechanical engineering maintenance of boilers, pressure vessels, and lifting equipment, the Boilers and Pressure Vessels Ordinance 1971 and provincial rules require that inspections be carried out by certified boiler inspectors. For engineering projects above a specified value threshold, the Pakistan Engineering Council (PEC) under the Pakistan Engineering Council Act 1976 requires that the lead engineer be a PEC-registered engineer in the relevant discipline. For healthcare facility maintenance — hospitals, clinics, medical equipment — the Pakistan Medical Commission and Drugs Regulatory Authority of Pakistan (DRAP) may impose additional requirements on maintenance of medical devices. The Maintenance Services Contract should warrant that the service provider's personnel hold all required licences and certificates, and should require the service provider to promptly notify the client if any licence is suspended or revoked.
Spare parts pricing is one of the most common sources of disputes in Maintenance Services Contracts in Pakistan, and the contract should address it precisely. The main approaches used in Pakistani practice are: (1) All-inclusive contract — the annual service fee covers all labour and specified spare parts (usually consumables and standard replacement parts), and the service provider cannot charge additional amounts for parts within the agreed scope. This approach provides cost certainty for the client but typically commands a higher base fee. (2) Labour-only contract with parts at cost plus markup — the service fee covers labour only, and the service provider charges separately for spare parts at actual procurement cost plus an agreed markup (typically 10–25%). This approach requires the client to verify parts pricing, and the contract should include an obligation on the service provider to provide original purchase invoices. (3) Rate schedule — the contract includes a pre-agreed rate schedule for commonly used spare parts, with a mechanism for pricing non-listed parts. For imported spare parts, the contract should address fluctuation in the PKR/USD exchange rate — a significant consideration given historic PKR depreciation against the US Dollar — by specifying whether spare parts are priced in PKR at a fixed rate or at the prevailing SBP indicative rate on the date of purchase.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
IT Services Agreement (Pakistan)
An IT Services Agreement for Pakistan — a technology services contract governed by the Prevention of Electronic Crimes Act 2016, the Electronic Transactions Ordinance 2002, and the Contract Act 1872, executed on stamp paper under the Stamp Act 1899.
Cleaning Services Contract (Pakistan)
A Cleaning Services Contract for Pakistan — a formal agreement between a client and a cleaning company or individual cleaner for regular or one-time cleaning services, governed by the Contract Act 1872 with provisions for scope, payment, and worker obligations.
Building Contract (Pakistan)
A Building Contract for Pakistan — a comprehensive construction agreement between an owner and a contractor for the design and build or build-only construction of a structure, governed by the Contract Act 1872, applicable building bylaws, and the Pakistan Engineering Council's professional standards.
Independent Contractor Agreement (Pakistan)
An Independent Contractor Agreement for Pakistan — a legally binding contract defining the terms of engagement between a business and a self-employed individual or firm, governed by the Contract Act 1872, distinguishing contractor status from employment under the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968.