The Karnataka High Court has quashed notices directing multiplexes and cinemas to collect a 2% cess on movie ticket prices, after the state government acknowledged that no official Gazette notification had been issued to bring the underlying law into force.
The order was passed on Thursday by Justice H.T. Narendra Prasad while hearing a writ petition filed by the Multiplex Association of India, PVR INOX Limited and PVR INOX shareholder Shantanu Pai. The petition challenged a circular issued by the Labour Commissioner directing mandatory cess collection from September 1, 2026.
The proposed Karnataka multiplex cess was linked to the Karnataka Cine and Cultural Workers Social Security and Welfare Act, 2024. According to the notice described in the petition, cinemas and multiplexes were required to collect 2% of each ticket price to provide funding for welfare schemes for cinema and cultural workers.
During the hearing, the state government’s counsel told the court that the Labour Commissioner’s August 29 order had been withdrawn. The counsel also stated that no official notification had yet been issued to bring the Act into effect.
The petitioners’ senior counsel, Uday Holla, argued that Section 1(2) of the Act required the government to issue a separate official notification specifying when the legislation would come into force. Despite the absence of such a notification, the petitioners said, notices had been issued treating the Act as operational and demanding payment of the cess.
The court relied on the government’s submission that no Gazette notification had been published regarding the commencement of the law. It consequently cancelled the notices issued to multiplexes in connection with cess collection.
The dispute centred on the legal authority to collect the charge rather than on the stated welfare purpose behind it. The proposed levy would have been collected directly through cinema ticket transactions, affecting multiplex operators and potentially the price structure applied to moviegoers. The judgment, as reported, prevents collection under the challenged notices while the commencement notification remains absent.
The case also places the implementation of the 2024 welfare law at the centre of the issue. The government had initially directed all cinemas and multiplexes to collect the cess from September 1, but its counsel told the court that the related order had been withdrawn. The court’s decision records the absence of the required Gazette notification as the basis for cancelling the notices.
The immediate effect of the order is that the notices directing multiplexes to collect the 2% ticket cess no longer stand. Any further move to implement the levy would depend on the statutory process for bringing the Act into force and on subsequent government action.
