Karnataka High Court Quashes Orders Enforcing 2% Cess On Cinema Tickets, Allows Multiplexes' Plea

The Karnataka High Court has allowed a plea filed by the Multiplex Association of India and PVR INOX Limited against the enforcement of the 2% cess imposed on cinema tickets under the Karnataka Cine and Cultural Activists (Welfare) Act, 2024.

Justice H.T. Narendra Prasad held that the measures seeking to operationalise and enforce the cess could not be sustained as the 2024 Act had not been brought into force through a valid commencement notification under Section 1(2).

The matter was first listed before the High Court on September 9, when the petitioners challenged the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, the Karnataka Cine and Cultural Activists Social Security and Welfare Rules, 2025, the 2026 amendment to the Act, and various measures taken to implement the cess.

They had also challenged the notifications, office orders, circulars, and enforcement notices issued by the authorities seeking to operationalise and enforce the cess against cinema halls and multiplexes.

The petitioners' primary challenge was that the 2024 Act had not been brought into force in the absence of a valid commencement notification under Section 1(2). They also challenged, without prejudice, the constitutional validity of the Act, the amendment, the Rules and the implementation measures.

The Court had directed the State authorities to take notice and listed the matter for further hearing today.

When the matter was taken up today, the petitioners submitted that there was no valid notification under Section 1(2) of the Act appointing a date for its commencement in the Official Gazette.

They argued that the Rules, appointments, office orders and notices could not substitute for the commencement notification required under the Act.

The State filed a memo stating that it was withdrawing the Circular/Office Order dated August 29, 2026, which had directed mandatory collection and remittance of the 2% cess on cinema tickets with effect from September 1, 2026.

The Court noted the State's withdrawal of the August 29 Circular/Office Order. It thereafter quashed the other impugned measures issued for enforcement of the cess, holding that they could not be sustained in the absence of a valid commencement notification under Section 1(2).

The Court accordingly allowed the writ petition and granted relief to the petitioners.

For Petitioners: Senior Advocate Uday Holla.