One year down the line, the state government has failed to collect Value Added Tax (VAT) from online shopping, despite the government issuing a notification in May 2013 to tap the leakage in VAT.

In May 2013, the Goa Tax on Entry of Goods (Amendment) Act, 2013, was notified and levied 5% VAT on goods bought online. But officials in the department of commercial tax told Times of India that the notification was issued but the government has still not framed the rules to collect tax on goods purchased online.

"The government is in the process of framing rules for entertainment tax and Goa value added tax and after that, the government will frame rules for Goa Tax on Entry of Goods," the official added.

Keeping in mind, that goods purchased online are delivered by courier or parcel service operators, the government has changed the definition of transporters so that the commercial tax department can tap the leakages.

The notification had defined that 'transporter' means any person who carries on the business of transporting goods on account of any other person into or outside or within the state of Goa and includes carrier, transporting agent, courier, parcel service operators and bus service operators.

'On failure of the transporter to pay tax levied under this section, the transporter and consignee shall be jointly and severally liable for payment of such tax and penalty levied,' it stated.

The government took the decision as it felt that online shopping does not generate revenue for the state treasury and was affecting local business.