Karnataka Governor Thaawarchand Gehlot has given assent to the Karnataka Cine and Cultural Activists (Welfare) Bill, 2024, which proposes a cess of up to 2 percent on movie tickets and OTT subscription fees for the benefit of cinema and ‘cultural artists’, MoneyControl reported.

In July 2024, the Karnataka Cine and Cultural Activists (Welfare) Bill was passed by the Karnataka Assembly and sent to the Governor for approval. Gehlot gave his assent on September 23.

According to the Act, a ‘Cine and Cultural Activists Welfare Cess’ will be imposed on cinema tickets, subscription fees, and related revenues within the state. The cess will range between one to two percent, as notified by the government, with revisions every three years.

Mohammad Mohsin, principal secretary,  Labour Department, told Moneycontrol: “We will now frame the rules since it has become an Act. Since GST is already applied to cinema tickets, we can only collect the cess, which will range between one and two percent.” On collecting cess from OTT subscription fees, he added: “We are working on the modalities for collecting the cess from OTT subscriptions, but it is likely to be linked with GST.”

It may be recalled that the Karnataka Governor in August returned 11 bills passed by both houses. Later, the state government sent clarifications sought by the Governor for five bills, including the Karnataka Cine and Cultural Artists (Welfare) Bill, 2024. Officials from the Labour Department said that only a welfare cess will be applied to the cinema ticket fare, as the state government cannot impose any tax other than GST