What Is an AMC? Comprehensive vs Non-Comprehensive Explained

An AMC (annual maintenance contract) is an agreement in which a service provider looks after equipment for a fixed yearly fee — computers, CCTV, air conditioners, lifts, printers, software. In a comprehensive AMC, the fee covers labour and the replacement parts. In a non-comprehensive AMC, the fee covers labour, visits and support, and parts are charged separately when needed. That single difference decides the price, the risk, and most of the arguments that follow.

Comprehensive vs non-comprehensive, side by side

• Parts: included in a comprehensive AMC (usually with a list of exclusions); billed extra in a non-comprehensive one.
• Price: a comprehensive AMC costs noticeably more, because the provider is carrying the parts risk.
• Risk: with comprehensive, the provider loses money on a bad year; with non-comprehensive, the customer does.
• Best for: comprehensive suits older equipment and customers who want a fixed annual cost; non-comprehensive suits newer equipment, often still under the manufacturer's warranty for parts.

Neither is better. A provider who sells only comprehensive contracts on ageing equipment will have a bad year eventually; a customer on non-comprehensive with ten-year-old machines will feel nickel-and-dimed. Match the contract to the equipment's age.

What every AMC should state

• The asset list — make, model and serial number of every item covered. "All CCTV at the premises" is a dispute waiting to happen.
• The period, start and end date, and how renewal works.
• Preventive maintenance visits — how many, how often, and what each one checks.
• Breakdown support — response and resolution times by priority, and whether remote support counts.
• Parts — included or not, and the exclusions list: physical damage, power surges, consumables, misuse.
• Fees and billing — annual, quarterly or monthly, and GST on top. Maintenance services are generally taxable at 18%; confirm the rate for your service and whether parts supplied change it.
• What ends the contract, and what happens to unused visits.

How to price an AMC without losing money

Start from cost, not from the competitor's price. Add up the preventive visits (hours × your cost per technician-hour, plus travel), an honest estimate of breakdown calls from last year's history for that kind of equipment, and — for comprehensive — the expected parts cost, with a margin for the bad year. Then add your margin. The commonest loss in this business is not a low price; it is a contract whose visits and breakdown calls were never counted, so nobody noticed the customer was costing more than they paid.

Who this does not apply to

A one-time repair is not an AMC, and neither is a manufacturer's warranty, which covers defects rather than maintenance. An extended warranty sold with a product is a different contract again, usually with the manufacturer, not the service company.

A test you can run this week

Take your five largest AMC customers. For each, find three numbers for the last year: what they paid, how many visits and calls they used, and what parts you supplied. If you cannot get those numbers in ten minutes, you do not know which contracts are profitable — and the ones you renew on autopilot may be the ones losing money.

Grovia's IT & service module records each AMC with its covered assets, scope, exclusions, whether parts and remote support are included, and an SLA tier. It counts included visits against those used, schedules preventive maintenance with a checklist per visit, links every service ticket to its contract so the contract's response and resolution times apply, and can raise the AMC invoice automatically each month, quarter or year. There is no separate "comprehensive" switch — you record it as parts included, with your exclusions.

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Frequently Asked Questions

What is the full form of AMC?

Annual Maintenance Contract: a yearly agreement in which a service provider maintains and repairs equipment for a fixed fee.

What is the difference between comprehensive and non-comprehensive AMC?

A comprehensive AMC includes replacement parts in the fee, usually with listed exclusions. A non-comprehensive AMC covers labour and visits, and parts are charged separately.

Which AMC is better?

Neither in general. Comprehensive suits older equipment and customers who want a fixed cost; non-comprehensive suits newer equipment that is less likely to need parts.

Is GST charged on an AMC?

Yes, maintenance services are generally taxable, commonly at 18%. Confirm the rate for your specific service and how supplied parts are treated with your CA.

What should an AMC contract include?

The list of covered assets with serial numbers, the period, preventive visits, response and resolution times, whether parts are included, exclusions, fees and billing frequency, and termination terms.