What is deemed supply?
Generally, any goods or services supplied without consideration (generally without received payment) is regarded as not a supply and is not subject to GST.
However, under certain circumstances where a supply is taken place even though no good or service is provided or no consideration is paid, it is call Deemed Supply. For example,
- Amount spanning Gift rule (value of the gift which more than RM500 for a single person in one year)
- Transfer or disposal of business assets without consideration
- Private use of business assets
- Non business use of business assets
- Supply of free service to connected person
- Imported services is payable by the recipient of the services using the reverse charge mechanism
- The remaining inventory for the person who deregistered from GST
In short, when there is a taxable supply taken place but no tax invoice to be issued yet still need to account the output tax prescribed by Customs, then the supply is Deemed supply.