Karnataka High Court Nullifies 2% Cess on Movie Tickets
The Karnataka High Court has annulled state government directives that mandated a 2% cess collection from cinema and multiplex theatres each month. This judgment was pronounced in the case of Multiplex Association of India v. State of Karnataka. Justice HT Narendra Prasad delivered the ruling, emphasizing that the orders were based on the Karnataka Cine and Cultural Activities (Welfare) Act, 2024, which has yet to be officially implemented since it has not been published in the Gazette of India.
Justice Prasad acknowledged the submission by the government advocate, stating that the Labour Department had already retracted the office order that required the 2% cess on cinema ticket sales under the Karnataka Cine and Cultural Activists Social Security and Welfare Rules. He remarked, “When the matter was posted yesterday, the government advocate was directed to take notice and instruction. The government advocate submitted a memo indicating that the respondent is withdrawing the impugned order Annexure-C by office order dated September 9, 2026, as enclosed. On instruction, the government advocate also submits that the State has not yet notified in the official gazette the said act of 2024 coming into force.”
The Karnataka Cine and Cultural Activities (Welfare) Act, 2024 was designed to provide social security to individuals identified as ‘cine and cultural activists’ through the establishment of a Welfare Board and Fund. Provisions of the Act include the collection of a welfare cess from cinema tickets, subscription fees, and related establishments, encompassing television channels and Over-the-top (OTT) platforms.
The contested office order and state notifications aimed to establish the Karnataka Cine Board and Cultural Workers (Welfare) Board, authorizing the collection of a 2% cess from cinema and multiplex theatres. Senior Advocate Uday Holla, representing the Multiplex Association of India, argued that the state had not specified any enforcement date for the Act.
