You must be aware that Karnataka Cine and Cultural Activists (Welfare) Bill, 2024, has slapped theatre owners and OTT platforms with a 2% cess.
While this move is supposed to support the insiders of the industry does it? Time to hear some opinions.
The additional 2% levy, although seemingly small, is an extra burden by industry players who argue that it will lead to higher prices for consumers.
This is not even a good time to slap the industry with this tax because it is already suffering through so many problems. People are not going to the theatres and even the growth of OTT platforms has plateaued.
Karnataka holds a 14% share in India’s ₹12,000 crore box office market, translating to an additional outflow of ₹35 crore for the industry due to the new cess. Similarly, with Karnataka’s 10% share in the country’s ₹10,000 crore subscription revenue market, the cess would result in an outgo of ₹20 crore. The total is a massive ₹ 55 Crores.
Industry insiders also point out that TV channels and OTT services are already subject to the GST (Let’s not talk about the tax trauma more). The new entertainment tax could be viewed as double taxation, potentially leading to legal challenges.
Obviously this case is going to be elongated further due to many reasons. Let’s see what it moves forward to.