How to record a GST/HST refund

Steps to record a goods and services tax (GST) and harmonized sales tax (HST) refund from the Canada Revenue Agency (CRA) in Sage 50 Accounting.

Consult with your accountant for advice on which of the following methods to use.

Using Payables (Vendors & Purchases) module

If you have already used payables to record GST/HST remittance and have the Receiver General as a vendor. It's recommended to use the same module to record GST/HST refund as a negative payment cheque.

1. Open the Payments journal.
2. Select Make Other Payment.
3. Choose GST/HST Charged on Sales in the account column.
4. Enter the amount of GST/HST charged.
5. Select GST/HST Paid on Purchases on the second line.
6. Enter the amount of GST/HST paid as a negative amount.
7. The total amount at the bottom will be negative. This journal entry will debit the bank account to increase its balance.

Using Receivables (Customers & Sales)

If your company is a Non-Profit organization and doesn’t charge any GST/HST, use the Receivables module to record GST/HST refund.

1. Create a customer record for the Receiver General.
2. Create a new sales invoice and select Receiver General as the customer.
3. Enter the amounts and account numbers for all GST/HST accounts.
4. The GST/HST Paid On Purchases amount will be positive.
5. The GST/HST Charged On Sales amount will be negative.
6. The invoice total will equal your refund amount, as calculated on the GST/HST Return.
7. Once you receive the refund cheque, create a receipt for the Receiver General.

Using General Journal

If you normally use General Journal to record GST/HST remittances, use the same module to enter the refund.

1. Open the General Journal.
2. Enter the last day of the GST/HST period that you’re getting a refund as the transaction date.
3. Click the magnifying glass in the Account column and select the GST/HST Charged on Sales account.
4. Enter the amount of total GST/HST charged in the Debit column.
5. Click the magnifying glass in the Account column and select the GST/HST Paid on Purchases account.
6. Enter the amount of total GST/HST paid in the Credits column.
7. On a new line, select the bank account into which you want to put your refund.
8. Enter the amount of the refund in the Debits column.
9. Click Process to update the accounts.