The High Court of Karnataka on Wednesday recorded the State government’s assurance that no coercive action would be taken against cinema theatre/multiplex operators, who have challenged the constitutional validity of the newly introduced 2% cess on movie tickets under the Karnataka Cine and Cultural Activists (Welfare) Act, 2024.
Justice H.T. Narendra Prasad, hearing petitions filed by Multiplex Association of India, PVR INOX, and Vinayaka Chitramandira Theatre, noted the submission made by the government advocate that no coercive steps would be initiated against the petitioners for violation of the provisions of the Act until the next hearing.
Following this assurance from the government, the court did not pass any interim order, including staying of the operation of the Act, which came into force on September 30. The protection from coercive action would be available only to the petitioners.
The petitions challenge Sections 9(1), 9(2), cine and cultural activists welfare cess, and Section 11, which mandates every employer to deposit the cess by the 10th of every month and submit prescribed half-yearly online returns with all required information of the Act.
Besides, the petitioners also challenged Rule 8(1) of the Karnataka Cine and Cultural Activists Social Security and Welfare Rules, 2025, which specifies cess as 2% of cinema ticket price. Challenging the levy, the petitioners argued that the State lacks legislative competence to impose cess.
They further submitted that the cess lacks a direct nexus with the beneficiaries of the welfare fund as the fund is intended to support several organisations operating beyond the sphere of cinema, despite the levy being imposed exclusively on cinema tickets.
The court adjourned further hearing on the petitions till October 26 while directing the government to file its written response to the petitions.
