India is asserting the right to tax multinational corporations that make capital contributions in exchange for shares in Indian subsidiaries to the extent the shares are worth more when issued than the contributed capital.

Both Vodafone and Shell said in February that they received transfer pricing adjustments by the Indian tax authorities. A Vodafone holding company in Mauritius subscribed for shares in Vodafone India for 8,000 rupees ($150) a share that the Indian authorities said were worth 50,000 rupees each ($934). Indian authorities hit the telecom company with a 13 billion rupee ($243 million) transfer pricing adjustment.

Shell was hit with a transfer pricing adjustment of 152.2 billion rupees ($2.86 billion) after an equity subscription by Shell Gas BV in Holland in shares of Shell India.

Both companies said they will fight the adjustments. India views the share subscriptions as outbound transfers of unreported value. The companies view themselves as simply having made capital contributions to their subsidiaries.