The Karnataka High Court on Thursday quashed notices issued to multiplexes seeking collection of a 2% cess on cinema ticket prices, after the state government told the court that the order directing the levy had been withdrawn and that no official notification bringing the law into force had been issued.
A single-judge bench headed by Justice H.T. Narendra Prasad was hearing a petition filed by the Multiplex Association of India, PVR INOX Ltd and PVR INOX shareholder Shantanu Pai. The petition challenged the circular issued by the Labour Commissioner on August 29, 2026, which directed all cinemas and multiplexes to collect the cess from September 1.
The government’s counsel told the court that the August 29 order had been withdrawn. The counsel also said that the state had not issued an official notification to bring the Karnataka Cinema and Cultural Workers Social Security Welfare Act, 2024, into operation.
The proposed cess was intended to fund welfare schemes for cinema and cultural workers. The notices sent to multiplexes had sought to make the 2% collection mandatory on every ticket sold.
Senior advocate Uday Holla, appearing for the petitioners, argued that Section 1(2) of the Act required the government to issue a separate official notification specifying when the law would come into force. He said that, despite the absence of such a notification, notices had been issued to multiplexes demanding payment under the legislation.
After hearing both sides, the court relied on the government’s submission that no Gazette notification had been published to bring the Act into force. It consequently cancelled the notices related to collection of the cess from multiplexes.
The ruling means that the notices challenged in the petition cannot be used to enforce the 2% levy. The court’s order, as reported during the hearing, was based on the absence of a formal notification bringing the legislation into effect and the government’s statement that the Labour Commissioner’s direction had been withdrawn.
