Karnataka: Now watching movies can be costlier; state to impose 2% tax on tickets and OTT subscription fees

On Friday (July 19), the Karnataka Cine and Cultural Activists (Welfare) Bill was tabled in the state assembly. The bill states that the cess would support the state's movie and cultural artists.

Watching films at cinemas may become more expensive in Karnataka. The state administration is proposing imposing a tax of up to 2% on cinema tickets and OTT subscription costs. On Friday, the Karnataka Cine and Cultural Activists (Welfare) Bill was introduced in the state legislature. The law proposes creating the 'The Karnataka Cine and Cultural Activists Social Security and Welfare Fund' and levying a 'Cine and Cultural Activists Welfare Cess' on movie tickets, subscription fees, and associated establishment revenue in the state. The tax might vary from one to two per cent and be amended every three years.

"The cess will be levied at rates which will be notified by the government and shall not exceed 2 per cent but shall not be less than 1 per cent on cinema tickets, subscription fees, and all revenue generated from the related establishments," according to the bill's quotation from Moneycontrol.

According to the measure, the cess is intended to help the state's film and cultural artists. While it is unclear how the tax on OTT subscriptions will be collected, the proceeds will be passed to the Karnataka Cine and Cultural Activists' Welfare Board.

“Cine and cultural activists include any person employed in the cinema field as an artist (such as an actor, musician, or dancer) or in any skilled, unskilled, manual, supervisory, technical, or artistic role. This also includes individuals engaged in activities declared by the government for this Act”, the bill added.

“Cine and cultural activists recognised by government-approved academies, such as the Karnataka Chalanachithra Academy, Karnataka Nataka Academy, Karnataka Sangeetha Nruthya Academy, Karnataka Janapada Academy, Karnataka Lalithakala Academy, Karnataka Yakshagana Academy, and Karnataka Bayalata Academy, are covered under this bill,” it stated.