In a major development for cinema exhibitors, the Karnataka High Court has overturned notices requiring the collection of a 2% tax on movie tickets. This decision, made on September 10, 2026, came as a result of a petition from the Multiplex Association of India (MAI), PVR INOX, and other stakeholders in the film exhibition industry.
The petitioners argued that the notices lacked legal basis, and the court supported this claim. It pointed out that the Karnataka Cine and Cultural Workers (Welfare) Act of 2024, which would allow for this tax, had not yet been officially announced. Without this announcement, the court declared that the notices directing cinemas to collect the tax were invalid and struck them down.
Along with this ruling, the Karnataka State Government has also withdrawn a previous office order from August 29, 2026, related to the same tax issue.
The MAI had expressed concerns that the additional tax would increase ticket prices, potentially deterring audiences from attending films, especially during a tough time for the exhibition industry. They argued that this move went against efforts to simplify taxes in the entertainment sector.
With the court’s decision now in effect, there are still questions about how to support cultural workers in the state. There may be a need to explore different ways of doing this that would not increase ticket prices for moviegoers.
The MAI has expressed willingness to engage in discussions regarding the ruling and its wider implications for both exhibitors and cinema audiences. They hope to address issues around taxation, affordability, and alternative methods to support worker welfare initiatives for the future of the cinema exhibition sector in Karnataka.
