Refund of HST

by Corinne
(Fairview, AB)

ITC Adjustment Setup

ITC Adjustment Setup

Good Day!

First of all, thank you for your great website! You answered lots of questions already, but I still have a few...

We import goods from the States and of course at the border we have to pay GST. Last year we got charged HST (was their mistake) and finally we got the money back. Unfortunately I couldn't figure out how and where to balance it in QB.

Plus, paid income tax from the previous year, where do I record this?

Thank you for your help and have a great day!


image of fancy scroll lines

Hi Corrine,

As a general rule, when you get a refund, you post it back to the account where the original entry was booked. In this case, I believe that would be your GST/HST payable account. I also assume you claimed the HST ITC. If that is the case, then this is what I would do:

I have included three snap shots above. You need to click on each one to move to the next one.

In the first snap shot titled "ITC Adjustment Setup", I am showing you how I usually setup an item for line 107 of the GST/HST Return.

I would prepare a journal entry as shown in the second picture above (HST Refund Journal Entry) ... except I forgot to remove the "x" in the adjusting entry box before I took the snapshot ... sorry about that.

You can see I am debiting the bank and crediting GST/HST Payable.

In the third picture with the caption "GST HST Report", I am illustrating where on your GST/HST report the adjustment will show up.

With regards your income paid for the prior year. I am assuming you are a corporation. If this is the case, I think this is the entry you are looking for:

You would debit Corporate Tax Payable and credit Cash in Bank.

You might want to review this other forum post on how to book your corporate tax instalments and accrue your corporate tax payable in the prior year.

Post back if you aren't clear on anything I've said Corinne.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Screen shots © Intuit Inc. All rights reserved.

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Mar 23, 2011
Thank you
by: Corinne

Thank you very much for your help! I'm very glad that I came across your website!


Jul 22, 2011
Refund of HST
by: Barbara

How do you record a general journal to show a refund of HST in the situation where the HST form has been submitted to Revenue Canada and the company receives a refund.

I have read the response to Corinne on this subject. Is that response also applicable to getting a refund in HST back from Revenue Canada after submitting the HST form? If it is, can you provide the details with the same pictures as in the response to Corinne.


Jul 23, 2011
Recording Your HST Refund
by: Lake

Hi Barbara,

If you were just filing your normal HST report using QuickBooks, I am assuming you used the Sales Tax Module to file your return.

When your return shows a refund, and you click to file the return, a question pops up asking you what you want to do. I always click on the response that creates an accounts receivable. Why? Because usually when I file the report, I don't have the funds yet.

Once I receive the actual HST refund from CRA, either by cheque or direct deposit, I receive the funds through the accounts receivable module. Doing this clears the outstanding accounts receivable with the Receiver General and places the funds in the Undeposited Funds account.

The next step is to then go in and make your bank deposit.

If you follow the above method, you should not have to use a journal entry to record the receipt of your HST refund.

I hope that answers your question Barbara.

Jul 23, 2011
I apologize
by: Lake


I apologize. I forgot to answer your request for screen images.

I am super busy right now ... but I will put it on my "to do" list to create a page with images showing how to process a GST/HST refund in QuickBooks.

I unfortunately don't have the time right now. :0(

Jun 30, 2017
Why to credit the GST payable account
by: Mohammed

Hi there, thank for the super nice website. I am just confused, when I got a refund for my gst, why should I credit the GST account. It is liability account and creditin this account means increasing my liabilities which I have to pay it.

What did I miss here?

Jul 02, 2017
by: Lake

If the HST refund was sitting in the GST/HST Payable account, the account would be in a debit position. Posting the refund as a credit would "clear" the refund (the debit balance).

If the GST/HST refund was reclassified to A/R or HST Receivable, then you would credit that account to clear the refund on the books.

Does that make sense?

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