India applies principle behind Vodafone tax ruling to other cases

MUMBAI, Jan 29 (Reuters) - The Indian government has asked its 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 (NYSE: IBM - news) and Microsoft (NasdaqGS: MSFT - news) , are involved in litigation over demands made by the tax office related to transfer pricing adjustments in the last couple of years. (Reporting by Sumeet Chatterjee; Editing by Clara Ferreira Marques)