Karnataka Likely To Levy 2% Cess On Movie Tickets, OTT Subscription Fees; BJP Reacts

The Karnataka state government has proposed a new cess, ranging between 1 to 2 per cent, on cinema tickets and Over-The-Top (OTT) subscription fees. This fee will fund social security benefits such as ESI and PF for cine artists and cultural performers, under the Labour Ministry’s Karnataka Cine and Cultural Activists (Welfare) Bill of 2024, which is set to be introduced in the current session.

According to a cabinet note obtained by News18, the bill aims to register unorganized workers in the sector and provide them with essential social security benefits like life insurance, accidental injury benefits, maternity leave assistance, financial aid, and educational support for children, phased in gradually.

“To finance these benefits, the bill proposes establishing a Cine Cultural Artistes Welfare Fund through a levy of not more than 2 per cent, and not less than 1 per cent, on cinema tickets, subscription fees, and revenues from related establishments in the sector,” the note stated.

The cess will also be extended to theatre plays staged within the state. Labour Minister Santhosh Lad highlighted the initiative’s goal to enhance living standards and ensure statutory benefits for artists and performers, including technicians and other workers who face intermittent employment.

“Karnataka Congress Govt is planning to impose 2% cess on Movie Tickets and OTT subscription fees. After JIZIYA TYPE TAX on Karnataka people on MILK, PETROL, DIESEL, BUS FARES, WATER NOW CINEMA TICKETS TO BECOME COSTLIER,” wrote Poonawala on X.

“Congress has looted Karnataka due to scams MUDA SCAM, VALMIKI SCAM, etc & stupid guarantee schemes & now people are being made to pay for it,” he added.

Karnataka Assembly’s Leader of Opposition, R Ashoka, criticized the state government’s move, claiming they are imposing this tax because they lack funds.

“The price of petrol, diesel and everything is rising. They have put a tax on movie theatres and OTT subscriptions also. This government has become a pauper government. So there is no money. That’s why they are generating the money,” said Ashoka.

The bill outlines the creation of a seven-member welfare board for cine workers and cultural activists, tasked with managing funds from the cess to support social security schemes.

While exact employment figures for Karnataka’s cinema and cultural sectors remain uncertain, the ministry estimates a substantial workforce beyond the 2,355 registered workers reported by the Karnataka Film Workers Artists Technicians Union.

How Karnataka Proposes To Impose Tax On Cinema, Theater And OTT?

The Karnataka Cine and Cultural Activists (Welfare) Bill of 2024 proposes a phased implementation to minimize the impact on the state budget, stressing the importance of preventing financial strain. It also mandates employers to deposit the cess monthly and submit biannual returns online or through a designated web portal.

If passed, the bill will establish the Karnataka Cinema and Cultural Artistes Welfare Board in Bengaluru, chaired by the department minister and a senior IAS official, overseeing seventeen government-nominated members representing various cultural sectors and academies.

Meanwhile, the BJP has slammed the Karnataka government’s proposal to levy a new cess on cinema tickets and OTT subscriptions. Taking on X, BJP spokesperson Shehzad Poonawala termed the new proposal another jolt by the Congress government to the people of Karnataka.