The Multiplex Association of India has opposed Karnataka’s proposed cess of up to 2% on cinema tickets, warning that the levy could raise the cost of movie outings and add compliance pressure on theatres when the exhibition sector is still rebuilding its audience. The proposed cess is scheduled to take effect on September 30, according to the Times of India report carrying the industry’s objections.
The dispute has a particularly strong Bengaluru dimension. Karnataka has close to 1,000 cinema screens, with around 35% located in Bengaluru. Yet the city generates nearly 50-55% of the state’s total box office revenue, and its contribution can rise to as much as 60% at times, the Multiplex Association of India said.
For viewers, the direct impact would be visible in the ticket price. Kamal Gianchandani, president of the association, said a 2% cess on a ticket priced at Rs 300 would amount to Rs 6, taking the price to Rs 306. The association argues that even a relatively small increase could work against efforts by theatres to make cinema-going more affordable and bring audiences back to physical venues.
Gianchandani said cinemas were still recovering from the effects of Covid and described the current year as the first post-pandemic year in which theatrical business had performed reasonably well. He also said the proposed measure would increase the compliance burden on businesses at a time when governments were promoting ease of doing business.
The association’s larger objection concerns the relationship between the proposed levy and the Goods and Services Tax framework. MAI said cinema tickets are already covered under GST and argued that adding a separate cess to the transaction would create a tax-on-tax effect. In its view, this would conflict with GST’s stated objective of replacing cascading taxes with a simplified and unified indirect tax structure.
The issue places the state’s cinema exhibition network between two competing priorities: raising funds for welfare initiatives and keeping a consumer-facing urban service affordable. Bengaluru’s unusually large share of Karnataka’s box office revenue means the city’s theatres are likely to remain central to the financial impact of any change, although the supplied report does not specify the expected revenue from the cess or the government’s detailed implementation framework.
Devang Sampat, managing director of Cinepolis India, said placing an additional burden on cinema-goers was not the appropriate way forward. He urged the Karnataka government to reconsider the proposal and explore other ways to fund welfare initiatives without increasing the tax load on consumers.
Gianchandani said the association was exploring all possible options if the government proceeds with the proposal. The next official step is expected to be the government’s decision on whether to implement the cess from September 30 and respond to the industry’s request for reconsideration.
