The Karnataka state government has proposed a new levy ranging from 1 to 2 per cent on movie tickets and Over-The-Top (OTT) subscription charges. The fee will fund social security benefits such as ESI and PF for film and cultural artistes under the labour ministry’s Karnataka Cine and Cultural Activists (Welfare) Bill, 2024, which will be introduced in the current session.

According to a cabinet note obtained by News18, the bill aims to register unorganised workers in the sector and provide them with essential social security benefits such as life insurance, accident benefits, maternity leave support, financial assistance and educational support for children, to be implemented gradually.

“To finance these benefits, the bill proposes to establish a Fund for the Welfare of Cine-cultural Artists through a levy of not more than 2 percent and not less than 1 percent on cinema tickets, subscription fees and income from related institutions in the sector,” the note said.

The cess will also be extended to plays staged within the state. Labour Minister Santhosh Lad stressed the aim of the initiative to improve the standard of living and ensure statutory benefits to artists and performers, including technicians and other workers facing irregular employment.

“Karnataka Congress Govt plans to impose 2% cess on movie tickets, OTT subscription charges. After JIZIYA TYPE TAX on Karnataka people on MILK, PETROL, DIESEL, BUS TICKETS, WATER NOW CINEMA TICKETS WILL BECOME MORE COSTLY,” Poonawala wrote on X.

“Congress has looted Karnataka through scams like MUDA SCAM, VALMIKI SCAM etc. and through stupid guarantee schemes and now people have to pay for it,” he added.

Leader of the Opposition in the Karnataka Assembly, R Ashoka, criticised the state government’s move, alleging that it is imposing the tax because it does not have sufficient financial resources.

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

The bill provides for the establishment of a seven-member welfare committee for film workers and cultural activists, which would be charged with managing tax funds to support social security systems.

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While exact employment figures for the film and cultural sector in Karnataka are still uncertain, the ministry estimates that there is a significant workforce beyond the 2,355 registered workers reported by the Karnataka Film Workers Artists Technicians Union.

How does Karnataka plan to tax cinemas, theatres and OTT?

The Karnataka Cine and Cultural Activists (Welfare) Bill, 2024 proposes a phased implementation to minimise the impact on the state budget, stressing the importance of preventing financial strain. It also makes it mandatory for employers to deposit the cess monthly and file biennial returns online or through a designated web portal.

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If the bill is passed, the Karnataka Cinema and Cultural Artistes Welfare Board will be set up in Bengaluru. It will be chaired by the departmental minister and a senior IAS official. It will oversee 17 government-appointed members representing various cultural sectors and academies.

Meanwhile, the BJP has criticised the Karnataka government’s proposal to levy a new levy on cinema tickets and OTT subscriptions. Responding to X, BJP spokesperson Shehzad Poonawala termed the new proposal as another shocker from the Congress government for the people of Karnataka.

While exact employment figures for the film and cultural sector in Karnataka are still uncertain, the ministry estimates that there is a significant workforce beyond the 2,355 registered workers reported by the Karnataka Film Workers Artists Technicians Union.

How does Karnataka plan to tax cinemas, theatres and OTT?

The Karnataka Cine and Cultural Activists (Welfare) Bill, 2024 proposes a phased implementation to minimise the impact on the state budget, stressing the importance of preventing financial strain. It also makes it mandatory for employers to deposit the cess monthly and file biennial returns online or through a designated web portal.

If the bill is passed, the Karnataka Cinema and Cultural Artistes Welfare Board will be set up in Bengaluru. It will be chaired by the departmental minister and a senior IAS official. It will oversee 17 government-appointed members representing various cultural sectors and academies.

Meanwhile, the BJP has criticised the Karnataka government’s proposal to levy a new levy on cinema tickets and OTT subscriptions. Responding to X, BJP spokesperson Shehzad Poonawala termed the new proposal as another shocker from the Congress government for the people of Karnataka.