Reporting entity designation expands to include chartered accountants, company secretaries and cost accountants, imposing KYC, recordkeeping and due diligence obligations.
The 3 May 2023 notification designates specified financial transactions carried out by practising chartered accountants, company secretaries and cost and management accountants as activities under section 2(1)(sa)(vi), thereby bringing those professionals within the definition of reporting entity under the PMLA. As reporting entities they must verify client and beneficial owner identity (section 11A), maintain transactional and identity records (section 12) with statutory retention, apply enhanced due diligence for specified transactions (section 12AA), and furnish records to the Director on request (section 12A); non compliance attracts inquiry, audit and monetary penalties under sections 13 and 50. (AI Summary)

Fundamental rights protection on arrest requires adherence to Rule of Law and custodial safeguards with enforceable writ remedies.
Fundamental protections against arbitrary arrest and detention rest on the Rule of Law and Articles 13, 14 and 21; Articles 20 and 22 provide specific safeguards including notice of grounds, right to counsel and timely production before a magistrate. Articles 32 and 226 permit writ remedies-habeas corpus, mandamus, certiorari, quo warranto and prohibition-for enforcement. Custodial jurisprudence mandates identification of arresting officers, an attested arrest memo, notification of relatives, medical documentation and access to counsel, and courts have held that non compliance may invite departmental and contempt consequences. (AI Summary)

Reverse charge liability for ocean freight where place of supply deems importer the recipient prevents dissecting composite import transactions.
The Court analysed whether importers under CIF contracts can be treated as recipients for reverse charge on ocean freight by construing place of supply and the recipient definition together, recognising that a supply whose place is deemed the destination may be made to the Indian importer. It held that delegated notifications must align with statutory powers, Parliament may tax extra territorial transactions with a real connection to India, and that the composite supply principle precludes a separate levy on a service element already included in the composite import transaction. (AI Summary)

Revocation of registration: officer may only verify returns and payment; ITC disputes require assessment proceedings.
Revocation of registration is limited to verifying that pending returns are filed and tax, interest, penalty and late fees are paid; assessment of ITC entitlement lies outside that revocation process. Rule 86A allows senior officers to restrict debit from the electronic credit ledger where there is reasoned belief of fraudulent or ineligible credit, but the restriction must be reasoned and ceases after one year, and its use where supplier non-payment is the sole basis has attracted legal challenge. (AI Summary)

Blocked input tax credit: construction and free sample rules limit ITC entitlement, subject to capitalisation and plant and machinery tests.
Blocked input tax credit under section 17(5) denies credit for works contract services and goods or services used in construction of immovable property when capitalised, and for goods lost, stolen, destroyed, written off, gifted or given as free samples. Determination depends on whether expenditures are capitalised, whether items qualify as plant and machinery (including foundations) or as immovable property by permanent attachment, and on whether losses are inherent to manufacture. Case law and guidance address reading down for letting purposes and exclude manufacturing loss from reversal. (AI Summary)

Input tax credit entitlement conditioned on tax being paid to treasury; matching and supplier recovery obligations shape eligibility.
Entitlement to input tax credit is conditioned on the tax charged for a supply having been actually paid to the government; delegated matching rules were challenged as inconsistent with the primary statutory criteria, and a legislative amendment now seeks to make supplier reporting and communication to recipients a formal prerequisite for credit. Courts have emphasized that authorities should first examine suppliers and initiate recovery before denying recipient credit, and may apply the doctrine of reading down to protect bona fide purchasers where a narrower construction is available. (AI Summary)

Intermediary service place of supply deemed at supplier location, risking domestic taxation and potential double taxation abroad.
Section 13(8)(b) of the IGST Act deems the place of supply for intermediary services to be the location of the supplier, thereby excluding such services from the export of services regime and subjecting Indian intermediaries serving foreign recipients to CGST and SGST rather than IGST; this deeming fiction can cause double taxation, conflicts with destination based GST principles, and has provoked constitutional challenge and parliamentary recommendations for amendment. (AI Summary)