Proposed cess of up to 2% on movie tickets, OTT fees will adversely impact film industry: Producers

'The additional cess will impact revenue for the industry. We pay GST on ticket sales and an additional cess on top of that would reduce our margins,' the President of the Karnataka Film Exhibitors Association, KV Chandrashekar, told DH.

Producers and exhibitors across the state feel the Karnataka Cine and Cultural Activists (Welfare) Bill, 2024, which proposes a cess of up to 2 per cent on movie tickets and OTT subscription fees, will adversely impact the film industry.

The Karnataka Cine and Cultural Activists (Welfare) Act, 2024 proposes a cess of up to two percent on movie tickets and OTT subscription fees for the benefit of cinema and 'cultural artists'.

DH spoke to producers and cinema exhibitors to get their perspective on how the recent proposal would impact the industry.

President of the Karnataka Film Exhibitors Association, KV Chandrashekar told DH, "The additional cess will impact revenue for the industry. We pay GST on ticket sales and an additional cess on top of that would reduce our margins. We provide ESI and provident funds for the workers. The government could've instead enrolled the children of these workers in government schools for free."

Chairman of the Karnataka Film Exhibitors Federation RR Odugoudar, explained to DH, "We will have to absorb the cost of this cess as we cannot charge the customer. The industry will take a hit on its revenue due to this. They could've charged the cess at the production level directly instead of collecting it from the public and expecting the exhibitors to absorb the cost."

Television and film producer S V Shivakumar opined, "OTT platforms will not be able to absorb the costs because the takers for Kannada OTT is very low. The customers will have to bear the cost of this cess. However, if the money collected from the cess reaches the right people, it is a welcome move."

Karnataka Film Chamber of Commerce President and veteran producer N M Suresh too said that he was very unhappy with the decision. "The government did not listen to us even after we submitted a later objecting this move," he lamented.