Will not take action against cinema exhibitors over 2% cinema ticket cess: State to Karnataka High Court

The State government on Wednesday assured the Karnataka High Court that it will refrain from taking any coercive action against cinema operators for now over any failure to collect a 2 per cent cess recently introduced on the price of cinema tickets [Multiplex Association of India & others v. State of Karnataka]..Justice HT Narendra Prasad was hearing petitions challenging the constitutional validity of the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, the amendments made to the Act in 2026, and the rules providing for the levy and collection of a cess on cinema ticket revenues. The cess is meant to be used for the welfare of cine workers. The law was scheduled to come into force today (September 30).During today's hearing, the Court suggested that no coercive steps be taken against the cinema operators for now. It noted that Section 9 of the legislation contemplates monthly compliance in relation to the cess. “The validity of the Act has been challenged. Till then (next hearing), don’t take any coercive steps," the judge told the State's counsel.The State, in turn, undertook not to take any coercive action till the next hearing against cinema operators in connection with the cess collection.“AAG prays two weeks’ time to file objection and submitted that till then they will not take any coercive action against petitioners," the Court recorded in its order passed today. .The petitions before the Court have been filed by the Multiplex Association of India (MAI), PVR INOX Limited, PVR INOX shareholders Prateek Chauhan, and cinema theatre, Vinayaka Chitramandira. Advocate KV Dhananjaya, appearing for Vinayaka Chitramandira, today submitted that the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, does not categorically state that the petitioners are liable to pay the cess.He pointed out that the legislation had come into effect today, and that the petitioners would be required to furnish their statements the following month.The counsel also submitted that there was no prescribed form even for registration under the legislation. He sought an interim stay on the operation of the Act..Appearing for the State, Additional Advocate General Bhanu Prakash submitted that notices earlier issued to the petitioners in connection with the cess collection were being withdrawn by the State.“Give us some four-five days. I will file objections and it can be heard and disposed of. We will not take any action,” the AAG added.He further requested the Court not to pass an order staying the legislation.The Court, therefore, refrained from expressly staying the law but recorded the State's undertaking that no coercive steps would be taken for now against cinema operators for any failure to collect the cess.The matter will be heard next on October 26.Senior Advocate Uday Holla appeared for Multiplex Association of India.