Yashpal scored 61 with the help of five fours and a six while first innings centurion Paliwal remained unbeaten on 47 with the help of six boundaries as Services reached the required target of 134 in 54.3 overs.
The institutional team now have 26 points from seven games and are on top of group C although they have played a match more than the second-placed Andhra. Only two teams can go through to the next round from group C while three teams qualify from group A and B.
Needing 63 runs on the day, Yashpal and Paliwal didn't take any risks as they quietly went about doing their job.
When Yashpal was finally stumped by glovesman Obaid Haroon off left-arm spinner Waseem Raza's bowling, Services were six shy off the target which was knocked off by Paliwal with a boundary off Manik Gupta.
Brief Scores: Jammu and Kashmir 85 and 269
Services 221 and 134/5 (Yashpal Singh 61). Services won by 5 wkts. Points: Services 6; Jammu and Kashmir 0.