Sub-contracting Agreement Format
Engage a sub-contractor for part of a project, passing down the scope, timelines and standards of the main contract.
What it is
A sub-contracting agreement is between a main contractor and a sub-contractor who carries out part of the work the main contractor has agreed to do for a client. It defines the scope, location and timelines, the value and payment terms, retention money held as security, liquidated damages for delay, performance guarantees, and how the main contract's requirements flow down. The main contractor remains responsible to the client for the sub-contracted work.
When it is used
- Construction and civil works projects.
- IT and engineering projects with specialist vendors.
- Manufacturing and installation work given out in parts.
What the template covers
- Main contractor and sub-contractor details, PAN and GSTIN
- Main contract reference and scope of work
- Location, commencement and completion dates
- Sub-contract value, payment terms and retention
- TDS, liquidated damages and performance guarantee
- Indemnity, insurance, termination and jurisdiction
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Agreement
Agreement Date; Place
Main Contractor
Main Contractor Name; Address; GSTIN
Sub-contractor
Sub-contractor Name; Address; PAN; GSTIN (if registered)
Work
Main Contract Reference; Scope of Sub-contracted Work; Location of Work; Commencement Date; Completion Date
Payment
Sub-contract Value (₹); Payment Terms; Retention Money (%); TDS Section
Performance
Liquidated Damages (₹/day for delay); Performance Guarantee; Governing Jurisdiction
Stamp duty, registration and filing
The main contractor deducts TDS on payments to the sub-contractor (Section 194C up to 31 March 2026 and Section 393 of the Income-tax Act, 2025 from 1 April 2026). GST applies on the sub-contractor's invoices, and works contract rules apply to construction. For building work, the sub-contractor's workers are covered by building workers' welfare and contract labour laws under the labour codes. Stamp duty depends on the State.
Generate the Sub-contracting Agreement
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows? Contact SKAG and Associates
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Frequently asked questions
Is the main contractor liable for the sub-contractor's work?
Yes. The main contractor remains responsible to the client and recovers its losses from the sub-contractor under the sub-contract.
What is retention money?
A percentage of each bill held back by the main contractor as security for defects, released after completion or the defect liability period.
Are liquidated damages enforceable?
Courts generally allow reasonable compensation up to the stated amount under Section 74 of the Indian Contract Act, without proof of exact loss in some cases.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.