Karnataka govt proposes to impose 2% cess on movie tickets, OTT subscription fees

The Karnataka state government has proposed a new cess ranging from one to two percent, on cinema tickets and over-the-Top (OTT) subscription fees to support film and cultural workers.

This fee will fund social security benefits such as ESI and PF for cine artists and cultural performers under the Labour Ministry's Karnataka Cine and Cultural Activists (Welfare) Bill of 2024. The Karnataka Cine and Cultural Workers (Welfare) Bill, 2024, was tabled in the Assembly on Friday. The cess will range from 1% to 2%, the exact rate of which will be decided by the government later.

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

The bill outlines the creation of a seven-member welfare board for cine workers and cultural activists, tasked with managing funds from the cess to support social security schemes.

The Karnataka Film Workers Artists and Technicians Union estimates that around 2,355 workers, including artists and technicians, are working in the industry. However, many small-time artists and technicians are not registered with any organisation in the state.

Mohsin said discussions are ongoing on whether OTT subscriptions will be included, and whether they will be focused on OTT productions from the local film industry. As per the proposal tabled in the assembly, each registered member will receive a unique ID card to avail benefits. There is some uncertainty about how cess will be levied on OTT subscriptions, which are generally managed through online platforms without local addresses.

The Karnataka Cine and Cultural Activists (Welfare) Bill of 2024 proposes a phased implementation to minimise the impact on the state budget, stressing the importance of preventing financial strain. If passed, the bill will establish the Karnataka Cinema and Cultural Artists Welfare Board in Bengaluru, chaired by the department minister and a senior IAS official, overseeing seventeen government-nominated members representing various cultural sectors and academies.