9.13 What is "Deemed Supply"?

Deemed Supply is restricted to goods on which the person has already claimed the input tax. It may apply where no consideration is received for the supply of goods or services.

Examples of Deemed Supply are:

1. Barter arrangements where goods sold are settled by other goods from customer

2. Free gift worth more than RM500 to staff

3. Hamper worth more than RM500 to customer

4. Free bottles of regularly sold shampoo to customers

However, there is no deemed supply where:

1. the business is transferred as a going concern to another taxable person;
2. the business is carried on by a personal representative who manages the estate or continues the business of a taxable person who has passed away, become bankrupt or incapacitated, or gone into liquidation or receivership;
3. the business can prove that the goods held on hand were acquired from a person who is not registered under GST;
4. the business can prove that no credit for input tax has been allowed on the goods held on hand in respect of;

• blocked input tax goods;

• goods acquired under the margin scheme; or

• goods acquired for making wholly exempt supply;

and the goods are not acquired under a transfer of going concern.