Karnataka HC grants relief to JioStar, Zee over 2% cess as broadcasters challenge law

Bengaluru: The Karnataka High Court on Wednesday directed the state government not to take any coercive action against television broadcasters, including JioStar India and Zee Entertainment over the levy of a 2% welfare cess under the Karnataka Cine and Cultural Activists (Welfare) Act, 2024.

Justice HT Narendra Prasad passed the interim order while hearing petitions filed by the Indian Broadcasting and Digital Foundation (IBDF), JioStar India and Zee Entertainment Enterprises challenging the constitutional validity of the 2026 amendment to the law and the rules governing the levy. The government gave effect to the levy through a notification issued on September 10 this year.

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The court also issued notice to the state government and sought its response to the petitions. Justice Prasad posted the case for further hearing on November 17.

The broadcasters sought quashing of the September 10 notification issued by the labour department and challenged the validity of the 2026 amendments and the 2025 rules that impose a 2% cess on broadcasters and related entities. They also sought to set aside all consequential actions arising from the notification.

The petitioners’ counsel argued that television broadcasters are fundamentally different from cinema theatres and do not directly collect subscription fees from viewers. They contended that broadcasters operate through distribution networks and have no direct interface with subscribers under Telecom Regulatory Authority of India (TRAI) regulations, making compliance with the statutory obligations impractical.

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The latest challenge comes weeks after multiplex operators and theatre owners, including the Multiplex Association of India (MAI), PVR INOX and other exhibitors, approached the High Court against the same levy. On September 30, the state government informed the court that it would not take coercive action against cinema operators for non-collection of the cess until the legal challenges are decided.

The amendments provide for a cess on cinema and related revenues to fund welfare measures for cine and cultural workers. The legislation came into force earlier this month.