A petition challenging Karnataka’s 2% cinema ticket cess has reached the Karnataka High Court, which has asked the state government to clarify whether the law authorising the levy is currently in force.
Justice H T Narendra Prasad issued notice to the state government on Wednesday in response to a plea filed by the Multiplex Association of India, PVR INOX Ltd and other petitioners. The case concerns the 2% cess on cinema ticket revenues under the Karnataka Cine and Cultural Activists (Welfare) Act, 2024.
The petitioners told the court that the state cannot demand the cess through circulars and notices when the parent legislation has not been brought into force through a commencement notification. They have challenged the government’s authority to require cinemas and multiplexes to collect the additional amount in the absence of such a notification.
According to the report placed before the court, the state issued a circular on August 29 directing cinema theatres and multiplexes across Karnataka to collect an additional 2% on ticket prices from September 1. The petitioners have disputed the legal basis of that direction.
The court has asked the government to specify whether the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, has come into force. The response is expected to address the petitioners’ contention that the Act remains inoperative without a formal commencement notification.
The challenge also covers the Karnataka Cine and Cultural Activists Social Security and Welfare Rules, 2025, and a 2026 amendment to the Act. The petitioners include industry representatives and multiplex operators, including PVR INOX, whose businesses would be affected by any requirement to collect and remit the levy.
The case places the collection of the additional cinema charge before the court while the state’s legal position remains to be submitted. The immediate question is whether the Act, rules and amendment provide an effective basis for the circular directing theatres to impose the 2% amount.
The Karnataka government will now respond to the notice issued by the High Court. The court’s further consideration will determine how the challenge to the cess and the related legal instruments proceeds.
