Karnataka High Court quashes 2% cess on cinema ticket revenue

Mangalore Today News Network

Bengaluru, Sep 11, 2026: The Karnataka High Court on Thursday quashed various orders and circulars issued by the state government imposing a 2% cess on cinema ticket revenues under the Karnataka Cine and Cultural Activists (Welfare) Act, 2024.

Justice H.T. Narendra Prasad passed the order while allowing petitions filed by the Multiplex Association of India (MAI), PVR INOX Ltd and others. The court also granted liberty to the petitioners to challenge the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, if and when it is notified.

The petitioners contended that the Governor gave assent to the Act on September 23, 2024, following which it was published in the official gazette. However, under Section 1(2) of the Act, its provisions would come into force only from a date notified by the state government in the official gazette. They submitted that no such commencement notification has been issued so far.

Despite this, the Labour Department issued a series of directions in 2026 seeking collection of a 2% cess from cinema halls, including multiplexes.

The petitioners challenged the circulars directing cinema theatres and multiplexes across Karnataka to collect an additional 2% on cinema ticket prices from September 1. They also questioned the parent Act, the Karnataka Cine and Cultural Activists Social Security and Welfare Rules, 2025, and the 2026 amendment to the Rules.

During the hearing, the government advocate submitted a memo informing the court that the Labour Department was withdrawing the office order/circular directing the collection of a 2% cess on cinema ticket sales, subscription fees and related establishments, including television channels and over-the-top (OTT) platforms, under the Karnataka Cine and Cultural Activists Social Security and Welfare Rules.