Chief Minister Manohar Parrikar told a state assembly session in state capital Panaji that Playboy's application had failed because it did not meet requirements to set up a beach shack.
"The shack policy of the state makes it mandatory that the application for any shack should be applied for by a local individual in his name and we can't grant shack permission for a brand," Mr Parrikar said.
PB Lifestyle, the Indian franchisee of the Playboy brand, announced plans in November to open 120 clubs, hotels, fashion cafes and shops in India over the next 10 years.
Goa's tourism minister Dilip Parulekar said the planned venue in Goa had sparked much discussion.
"There have been concerns raised about vulgarity being promoted through the club. We are aware of how prostitution is rampant in the state's coastal belt," he said.
In a bid to appease the country's conservative values, Playboy in December unveiled a new-look costume for the "bunny girl" waitresses in its Indian outlets.
The traditional skimpy corset has been replaced with a sari-inspired two-piece costume, comprising a one-shoulder top, a bare midriff and a sheer, full-length skirt with a split. The ears, bow-ties and fluffy tails remain.
Playboy magazine remains banned in India, along with a host of other foreign "adult" publications, owing to obscenity laws banning material deemed "lascivious or appealing to prurient interests".
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