Sep 29, 2026 5:18pm IST
Karnataka High Court To Consider Stay On 2% Cinema Ticket Cess As Multiplex Association Challenge Levy
The Karnataka High Court will on Wednesday consider an interim plea seeking a stay on the enforcement of the 2% cess on cinema tickets in the state. The court, while hearing petitions challenging the constitutional validity of the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, its 2026 amendment and the rules governing the levy, has asked the Karnataka government to respond.
Justice H T Narendra Prasad was hearing petitions filed by the Multiplex Association of India, PVR INOX and others challenging the legislation and the framework through which the cess is sought to be collected. The petitioners have also challenged the September 10 notification appointing September 30 as the date on which the amended provisions are to come into force.
The court indicated that, apart from examining the constitutional challenge, it would consider whether the consequences of the legislation should be kept in abeyance while the petitions are heard. The bench also questioned the State's authority to issue compliance notices before the legislation had come into force.
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The latest proceedings follow an earlier round of litigation over the cess. In September, the Karnataka government withdrew an office order directing collection of a 2% cess from cinema and multiplex theatres, after petitioners argued that the parent legislation had not yet been brought into force through a Gazette notification. The High Court subsequently quashed the impugned order and related notices.
Under the 2024 Act, the welfare cess can be levied on cinema tickets, subscription fees and revenue generated by related establishments, with the rate prescribed by the government between 1% and 2%. The legislation provides for the proceeds to be transferred to a welfare board for cine and cultural activists.
The petitioners in the latest challenge have questioned the State's legislative competence to impose the levy, arguing that the 2% cess is effectively a tax and that the constitutional provisions cited by the State do not confer the necessary taxing power. They have also challenged the mechanism for determining, collecting and recovering the cess, as well as provisions relating to penalties and enforcement.
The court is expected to hear the State's response and the interim plea on Wednesday. Until the court decides the stay application, the challenge to the 2% cinema ticket cess remains pending.
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