Watching movies on OTT platforms, cinemas likely to become a costlier prospect in Karnataka

The Karnataka government is mulling a new tax on cinema tickets and OTT subscription fees to support film and cultural workers. The Karnataka Cine and Cultural Workers (Welfare) Bill was tabled in the state Assembly on Friday and seeks to impose 1% to 2% cess. The additional funds will be used to fund social security benefits such as ESI and PF for cine artists and cultural performers.

“There shall be levied, a cess on the cinema tickets, subscription fees and all revenue generated from the related establishments in the state, a welfare cess known as “the Cine and Cultural Activists Welfare Cess”. The cess shall be at such rates as may be notified by the Government, and it shall not exceed two percent but shall not be less than one percent on cinema tickets, subscription fees and all revenue generated from the Related Establishments,” read an excerpt from the Bill.

Labour Department Secretary Mohammad Mohsin also indicated plans to extend the cess to theatrical plays performed in the state. The board will use the proceeds to support social security schemes for film workers.

The development comes mere days after the Karnataka government found itself mired in controversy over the Kannadiga job reservation bill. The proposal to enforce 50% reservation for administrative posts and 75% for non-administrative posts in private sector organizations, industries and enterprises has faced backlash from several quarters. Chief Minister Siddaramaiah indicated on Wednesday that the Bill had been been temporarily put on hold.

“The bill approved by the cabinet to provide reservations for Kannadigas in private sector organizations, industries and enterprises has been temporarily put on hold. This will be revisited and decided in the coming days. The draft bill intended to provide reservations for Kannadigas in private sector companies, industries, and enterprises is still in the preparation stage. A comprehensive discussion will be held in the next cabinet meeting to make a final decision,” Siddaramaiah posted on X.

(With inputs from agencies)