The inspector rule when you run pvc on a service. (on down run)
He's exactly wrong. To quote myself:
The basics: On the line side of whichever enclosure houses the main disconnect (and ignoring the meter), there is no EGC, there is only the neutral.
The main disconnect is where the premises grounding system begins as separate conductors, and its connection to the service neutral is the main bonding conductor. The grounding electrodes (rod(s), water pipe, building steel, etc.) must also connect to the service neutral at (or before) this point.
Any circuits leaving this enclosure, whether branch circuits or feeders, must include an EGC separate from the neutral (if there is one), and said neutral should never be bonded to ground again. Except for switching, fusing, etc., we treat the neutral as we would any ungrounded (hot) conductor.