Moviegoers in Karnataka could soon face higher ticket prices as the state government plans to implement an additional 2% cess on cinema tickets. This new levy is slated to take effect from September 30, 2026, a move that has drawn significant criticism from the cinema exhibition industry.
Industry Voices Strong Opposition
The Multiplex Association of India (MAI) has swiftly expressed its concerns regarding the proposed Karnataka cinema cess. The association argues that this additional charge will directly increase the cost of a cinema outing, making entertainment less accessible for consumers. This comes at a critical time when the industry is actively working to encourage audiences to return to theatres.
Kamal Gianchandani, President of the Multiplex Association of India, stated, "At a time when the Government has been pursuing tax rationalisation and ease of doing business, introducing an additional levy on cinema tickets is counterproductive and ultimately places an additional burden on the consumer. Cinema is a mass entertainment medium enjoyed by millions of families and young people, and every additional tax makes the experience less affordable."
Contradicting GST Objectives
MAI also highlighted that the proposed cess runs contrary to the fundamental objectives of the Goods and Services Tax (GST) regime. A primary goal of GST was to eliminate cascading indirect taxes. The association contends that levying an additional cess on a transaction already subject to GST risks reintroducing a "tax-on-tax" effect, which the GST framework sought to abolish.
The industry advocates for a taxation framework that prioritizes simplicity, transparency, and predictability for both consumers and businesses.
Call for Alternative Funding Mechanisms
Beyond the direct impact on movie ticket prices, MAI emphasized the cinema exhibition industry's substantial contribution to Karnataka's economy. This includes providing employment and supporting a broad ecosystem encompassing filmmakers, distributors, production companies, mall operators, food and beverage businesses, and technology providers.
Mr. Devang Sampat, Managing Director of Cinepolis India, urged the government to reconsider. "We fully recognise the importance of supporting artists and cultural workers, and we remain committed to working constructively with the Government on measures that can achieve this objective. However, placing an additional burden on cinema-going consumers is not the appropriate way forward. We urge the Karnataka Government to reconsider the proposed cess and explore alternative mechanisms for funding welfare initiatives without increasing the tax burden on the consumer," he said.
MAI has affirmed its commitment to engage with the Karnataka Government and other stakeholders to find a mutually beneficial solution that supports the welfare of the creative community while safeguarding consumer affordability and ensuring the long-term growth of the cinema exhibition sector.