Govt applies Vodafone tax ruling principle to other cases

Mumbai: The government has asked tax officials to apply the principle behind a tax ruling involving Vodafone Group Plc to all similar transfer pricing cases, an official letter seen by Reuters showed.

The government had said on Wednesday that it would not appeal a regional court ruling in favour of Vodafone in a long-running dispute under which the tax office had accused a unit of the British group of under-pricing shares in a rights issue.

Tax lawyers had said they expected the government order to impact all the past and future cases.

Many of the largest foreign companies in India, including IBM and Microsoft , are involved in litigation over demands made by the tax office related to transfer pricing adjustments in the last couple of years.