The Karnataka High Court on Thursday quashed orders issued by the State government that allowed the collection of a 2% cess from cinema and multiplex theatres every month [Multiplex Association of India v. State of Karnataka].

Justice HT Narendra Prasad noted that the notification and office order were passed under the Karnataka Cine and Cultural Activities (Welfare) Act, 2024, which had not yet been enforced since the State had yet to notify it in the Gazette of India.

Justice Prasad noted the government advocate's submission that the Labour Department had withdrawn the office order that directed the collection of 2% cess on the sale of cinema tickets under the Karnataka Cine and Cultural Activists Social Security and Welfare Rules.

"When the matter was posted yesterday directed the government advocate to take notice and take instruction. The government advocate has filed a memo stating that the respondent is withdrawing the impugned order Annexure-C by office order dated September 9, 2026 as enclosed. On instruction, government advocate also submits that State has not yet notified in the official gazette of the said act of 2024 coming into force."

The Karnataka Cine and Cultural Activities (Welfare) Act, 2024 was passed to provide social security to persons described a 'cine and cultural activists' through the constitution of a Welfare Board and Fund. The Act provided for the collection of a welfare cess from cinema tickets, subscription fees and related establishments which would include television channels, and Over-the-top platforms (OTT).

The challenged officer order and notifications issued by the State government directed the establishment of a Karnataka Cine Board and Cultural Workers (Welfare) Board and empowered collecting authorities to collect a 2% cess from cinema and multiplex theatres.

Senior Advocate Uday Holla, appearing for the Multiplex Association of India, submitted the State had not appointed any date on which the Act would be enforceable.