[Case Summary]This case involves a dispute over a construction contract. In August 2005, the plaintiff, Li *xin, undertook the "XXX Town Central Heating Project" located in a city in Inner Mongolia for the defendant, XX Thermal Power Co., Ltd. The project was completed and delivered in July 2011. The defendant issued a "Statement" confirming that it owed the project payment of 661,752.9 yuan, of which 342,522.9 yuan had been paid and 319,230 yuan remained outstanding. The defendant argued that the plaintiff was not a qualified party and raised the defense of statute of limitations, and also counter-sued for invoices. The plaintiff entrusted Beijing Henglu Law Firm to handle the case.Su BenkaiThe lawyer represented the client, claiming the right to exercise a defense of sequential performance and arguing that the project payment had not exceeded the statute of limitations. The court ruled that the statute of limitations had not expired and that the plaintiff was a qualified party. It ordered the defendant to pay the project payment of 299,230.90 yuan and instructed the third party to provide the defendant with construction and installation invoices. The core disputes included: litigation subject, statute of limitations, invoice and payment performance sequence, and counterclaim. Applicable legal provisions: Article 526 of the Civil Code, the Invoice Management Measures, etc.

I. Review of the Case Facts

"Is it legal for the employer to withhold the project payment on the grounds of not issuing an invoice?" "Can the contractor claim the project payment if they haven't signed a contract?" "How to handle disputes over project payment invoices?" These are common challenges faced by contractors. In August 2005, the plaintiff, Li *xin, undertook the "XXX Town Centralized Heating Project" located in a city in Inner Mongolia, which was contracted by the defendant, XX Thermal Power Co., Ltd. (hereinafter referred to as XX Thermal Power Company). The project was completed and delivered in July 2011.

On July 26, 2011, the defendant issued a written "Note" to the plaintiff, confirming that he still owed the plaintiff a project payment of 661,752.9 yuan. On October 10, 2011, the defendant paid a project payment of 342,522.9 yuan, and the remaining 319,230 yuan has not been paid to date. Therefore, the plaintiff, Li *xin, has entrusted our law firm to handle this case.Su BenkaiThe lawyer is representing this case and requests that the defendant be ordered to pay the project fee of 319,230 yuan and the interest, and that the defendant bear the litigation fees.

The defendant, XX Power Company, argued that it did not agree with the plaintiff's claims, contending that the plaintiff was not the main construction entity involved in the case and was not a suitable litigation subject; that the plaintiff's claims had exceeded the statute of limitations; and that the plaintiff should bear the litigation costs. The defendant also filed a counterclaim, requesting the court to order the counterclaimant to provide a special invoice for value-added tax on construction projects (for an amount of 3,192,292.9 yuan) and to bear the litigation costs and reasonable expenses.

II. The focus of the case

  • Focus 1: Whether the plaintiff's claim and the defendant's counterclaim have exceeded the statute of limitations.The defendant raised a defense of statute of limitations, which needs to be judged in light of the payment milestones of the project funds.
  • Focus II: Whether the plaintiff, Li *xin, is a qualified subject of the lawsuit in this case.The defendant claimed that he was not the main contractor of the construction project.
  • Focus Three: Which comes first, the issuance of invoices or the payment of project funds?The key issue is whether the defendant's argument that withholding the "invoice tax" as a defense to payment is valid.

III. Professional intervention by Hengluo Lawyers

The plaintiff (the contractor) claimed that:The defendant issued a "Statement" confirming the debt, stating that after making the payment, there is still a balance of 319,230 yuan owed. The defendant requests the payment of the project funds and interest.

The defendant (the employer) argued and counter-claimed that:The plaintiff is not the main contractor and his claim has exceeded the statute of limitations; in the counterclaim, the defendant requires the plaintiff to first issue a construction and installation invoice for the amount of 3,192,292.9 yuan.

Hengluo Lawyer's Agency Opinion:Su BenkaiThe lawyer pointed out in response to the counterclaim: First, according to the "Invoice Management Measures" and Article 526 of the Civil Code, before XX Thermal Power Company fulfills its payment obligation, the plaintiff enjoys the right of defense of sequential performance, and his request to issue invoices first has no legal basis and should be rejected; Second, the total project payment of 3,192,292.9 yuan, before the reform of the business tax into value-added tax, the construction business tax rate was 3%, assuming that no invoices were issued, the tax amount was only about 957,687.87 yuan. The defendant withheld the remaining 3,192,30 yuan as invoice tax, which was obviously more than the tax amount, and the defense should not be supported; Third, the defendant should pay first, and the plaintiff only has the obligation to issue invoices. The obligation should be performed in sequence, and the preliminary withholding of tax should not be supported; Fourth, the calculation and payment of invoice tax are administrative duties, and the court should not handle them to avoid judicial interference with administration.

IV. Outcome of the case

The court heard the case around three key points and concluded that the statute of limitations had not passed in this case; XX Thermal Power Company owed the project payment to the actual construction worker Li *xin, so Li *xin was qualified as the plaintiff in this case; in the case where the taxpayer cannot pay the taxes on behalf of the taxpayer, XX Thermal Power Company should pay Li *xin the total amount of the project payment owed, which is 299,230.90 yuan. Based on the above, the judgment is as follows: 1. The defendant (counter-plaintiff) XX Thermal Power Co., Ltd. shall pay the plaintiff (counter-defendant) Li *xin the project payment of 299,230.90 yuan within five days after the judgment takes effect; 2. The plaintiff's other claims are dismissed; 3. The third party, XX Construction Engineering Co., Ltd. Huifeng Branch, shall provide the defendant with a special invoice for value-added tax on construction and installation worth 3,192,292 yuan within fifteen days after the judgment takes effect.

5. Hengluo Law Firm's Reminder

The project payment and the invoice belong to different legal relationships, and the employer shall not use the "non-issuance of invoices" to evade its payment obligation. This case was handled by Beijing Henglu Law Firm.Su BenkaiThe attorney (practice license number: 11101202110375397, subject to the document issued by the judicial administrative organ) acts as an agent and reminds the constructor to keep the settlement statement and exercise the right of defense in accordance with the law to claim the right of sequential performance.

VI. Common Questions and Answers about Construction Contract Invoices and Project Payments

  1. Q: Is it legal for the employer to deduct the project payment on the grounds that no invoice has been issued?
    A:It's illegal. Payment and invoicing are separate obligations. The employer cannot use the lack of invoices to refuse payment, and the contractor can assert the right of defense of sequential performance.
  2. Q: What should I do if the "invoice tax" withheld exceeds the actual tax amount?
    A:The amount of tax is calculated according to the statutory tax rate. If the amount withheld obviously exceeds the tax payable, the excess part shall still be paid to the constructor as project payment.
  3. Q: Can I get back the project payment even without a written contract?
    A:Yes. The settlement statement, payment vouchers, and construction records issued by the employer can all prove the existence of a contractual relationship and the amount of the outstanding debt.
  4. Q: When does the statute of limitations for engineering payment litigation begin to run?
    A:It shall be calculated from the expiration of the agreed or statutory payment period; continuous reminders and partial payments may interrupt the statute of limitations and restart the calculation period.
  5. Q: Will the court order the issuance of an invoice?
    A:The issuance of invoices is an obligation under administrative law. Courts generally do not issue direct orders in this regard, but they may determine the order of payment and invoice issuance. If necessary, the matter will be handled by the tax authorities.