GST on refunds and lost chargebacks: a BAS guide for sellers

A customer is refunded, a dispute is lost, and a BAS is due. Where does the GST go? ATO guidance on refunds is clear. On lost chargebacks, the page we read is silent. Here is what is known, what is not, and what to ask.

GST on refunds and lost chargebacks depends on what actually happened to the sale. The ATO says a refund after returned goods is an adjustment event, reported after you reimburse the customer. Its adjustments page does not mention chargebacks, so treatment of a lost dispute is unconfirmed and needs a registered tax agent's view.

This guide on GST on refunds and lost chargebacks is for you if:

You are registered for GST and have refunded customers or lost disputes this quarter.
You are not sure whether a lost chargeback changes the GST on your BAS.
You want your records tidy enough that your accountant can answer in one email.

Last updated: 10 October 2026. Written by the ChargeFix team. Reviewed against sources on 10 October 2026.

The 30-second answer (TL;DR)

The ATO's page on when to make adjustments (last updated 14 September 2026) lists a cancelled taxable sale, such as a customer returning goods and you refunding the price, as an adjustment event.

For a decreasing adjustment on a sale, the ATO says you must reimburse your customer before reporting it on your activity statement.

You generally report an adjustment in the activity statement for the period in which you become aware of the need for it. On a cash basis, the adjustment goes in the period in which you make the payment, and a partial payment adjusts only for the amount actually paid.

The page does not mention chargebacks or card disputes. We found no ATO source on GST for a lost chargeback, so this guide does not state a rule. It gives you the questions and the records instead.

Keep a one-line record for every refund and every dispute, matched to the Shopify payout detail, and give your tax agent the full set at each BAS.

Quick note: This guide is general information, not tax advice, and we are not tax agents. The ATO page we read covers refunds of returned goods. It does not cover chargebacks, BAS due dates or accounting methods in the detail a full BAS guide would need, and we could not source those for this post, so we have not stated them. Confirm anything that affects your BAS with the ATO or a registered tax agent.

GST on refunds and lost chargebacks at a glance

Question	Short answer	Source
Is a refund for returned goods an adjustment event?	Yes, a cancelled taxable sale is	ATO adjustments page
When can you report it?	After you reimburse the customer	ATO adjustments page
Which period?	Generally the current period when you become aware of it; on a cash basis, the period you pay	ATO adjustments page
Is the sale already reported?	If not yet reported, include the final amended amount instead	ATO adjustments page
Is a lost chargeback covered?	Not mentioned on the page we read	ATO adjustments page
Who decides the treatment?	Ask the ATO or a registered tax agent	Our recommendation

What counts as an adjustment when you refund a customer?

An adjustment is a correction to GST you already reported, or will report, on a sale or purchase. The ATO lists several adjustment events, and the one that matters here is a taxable sale being cancelled, for example when a customer returns goods and you refund the price. Other sale events include a changed sale price, such as a rebate.

The ATO's adjustments page names the following events. We list them as the page states them, because the exact wording is what you will discuss with your tax agent.

Side	Adjustment event named by the ATO
Sales	A taxable sale is cancelled, such as when a customer returns goods and you refund the price
Sales	The sale price changes, such as when you give a customer a rebate
Sales	An event makes a sale taxable, such as GST-free export goods that are not exported
Sales	An event makes a sale stop being taxable
Purchases	A purchase is cancelled, such as when you return goods and receive a full refund
Purchases	The purchase price changes, such as when you receive a rebate
Purchases	An event makes a purchase creditable, or stop being creditable

Is a partial refund an adjustment too?

The page lists a changed sale price as an adjustment event, with a rebate as the example, and it deals with partial payments on a cash basis. We did not find a worked example of a partial refund after a complaint, so ask your agent how they treat one. What you can do now is record the original price, the amount refunded and the reason, so the numbers are ready.

What if the sale has not been reported yet?

The ATO says no adjustment is needed if the sale or purchase has not yet been reported. You include the final, amended amount when you first report it. In practice, that means a refund issued in the same period as the sale may simply reduce the amount you report for that period. Your agent will tell you how your software handles that.

How do GST on refunds and lost chargebacks differ?

A refund is something you do: you decide to give money back, and the sale is cancelled. A lost chargeback is something done to you: the bank takes the money and Shopify passes the loss on. The ATO page covers the first and is silent on the second, so they cannot safely be treated as the same thing without advice.

	Refund you issue	Lost chargeback
Who acts	You	The cardholder's bank, after a dispute
Are the goods returned?	Usually, for a returned-goods refund	Depends on the case, so record it
Is the sale cancelled by agreement?	Often yes	Not necessarily
ATO page we read	Covered as an adjustment event	Not mentioned
What we can say	Follow the adjustment rules	Ask a registered tax agent

Our post on chargeback vs refund in Australia sets out how the two differ in the Shopify process, including the fact that no refund is possible while a chargeback is open. That difference matters for tax records too, because it affects which event you are recording.

Why do we not state a rule for lost chargebacks?

Because we could not find one. The ATO page we read does not mention chargebacks, and no other ATO source we opened addresses them. A confident rule from us would be a guess, and a wrong guess goes onto a lodged BAS. We would rather give you a clean set of records and the right questions. The questions are in the section below.

When do you report a refund on your BAS?

Generally in the activity statement for your current reporting period, once you have become aware of the need for the adjustment and reimbursed the customer. On a cash basis the ATO says to adjust in the period in which you make the payment. A partial payment adjusts only for the amount actually paid in that period.

Rule from the ATO page	Plain meaning
Report when you become aware, in the current period	Do not go back and rewrite old statements by default
You must reimburse your customer before reporting a decreasing adjustment on a sale	Refund first, report second
Cash basis: adjust in the period you make the payment	The payment date decides the period
Partial payment: adjust only for the amount paid	Instalment refunds are split by period
Not yet reported: include the final amount	No separate adjustment is needed

What does "reimburse before reporting" mean for Shopify refunds?

It means the refund has to actually reach the customer before the adjustment goes on your statement. Shopify shows the refund on the order, and the money comes out of your next payout, according to the lower or missing payouts page. If you refund to the original payment method, the record is clear. NAB's merchant guide warns that refunding to a bank account instead of the original card risks a double refund, which would create a second loss and a messy record.

Illustration: a refund across a quarter end. A customer returns a product and you agree to refund A$132.00, the GST-inclusive price. For a standard taxable sale, GST is one eleventh of the price, which is A$12.00, so the sale excluding GST was A$120.00. Suppose you pay A$66.00 on Tuesday 29 December 2026 and A$66.00 on Monday 4 January 2027, perhaps because the customer's card was being replaced. On a cash basis, with the ATO's partial payment rule, the first A$66.00 adjusts for the period that includes 29 December, and the second A$66.00 for the period that includes 4 January. The GST in each payment is A$6.00 (A$66.00 divided by 11). If you report quarterly, those fall in different quarters. Check your own accounting method and reporting period with your agent.

The arithmetic is simple: A$66.00 plus A$66.00 is A$132.00, and A$6.00 plus A$6.00 is A$12.00. The point of the example is the split, not the numbers. Splitting a refund over a quarter end changes which statement carries it.

What happens to GST when you lose a chargeback?

We cannot state a rule, because the ATO page we read does not cover it. What we can do is show what changes in the money, so you know exactly what to ask. When you lose, Shopify's terms say it may recover the chargeback amount and associated fees, and liability includes the full purchase price plus the original shipping cost.

Here is what a lost dispute does to the money, using the Shopify pages:

Item	What happens	Source
Disputed amount	Taken when the chargeback opens	Shopify chargebacks pages
Chargeback fee	Taken with it; the A$ amount is unconfirmed	Shopify pricing and terms
Shipping	Included in liability: the original shipping cost	Australian Shopify Payments terms, C5 and D5
Win	Amount and fee returned per the resolve page	Shopify resolve page
Goods	Record whether they were returned or not	Our recommendation

What are the questions to ask your tax agent?

These are the questions that decide the treatment. Send them in one email, with the numbers, and keep the reply with your BAS papers.

Subject: GST treatment of a lost card dispute, [business name]

Hello [name],

I run an online store on Shopify and I am registered for GST. I accounted for
GST on order [#number] (A$[price incl. GST], including A$[shipping] shipping)
in the BAS for [period].

On [date] the cardholder's bank opened a chargeback. I lost it on [date].
Shopify recovered A$[amount] plus a fee of A$[fee]. The customer [kept / returned]
the goods.

Please advise:
1. Is this an adjustment event for the sale, and if so, in which period do I
   report it?
2. Does the answer change if the goods were returned, or were not returned?
3. How should I treat the fee Shopify charged: is any GST included, and can
   I claim a credit?
4. If I win later and the money is returned, how do I reverse it?
5. Does my accounting method (cash or accrual) change any of this?

The Shopify payout export for the period is attached.

Regards,
[Name]

What about a dispute you win?

A win returns the amount plus the fee, per Shopify's resolve page. A win can still be re-disputed by the bank with a new deadline, and it still counts toward your dispute rate. For your books, that means a won dispute should be recorded when the money actually returns, not on the day you submit evidence. The bank can take up to 75 days after you submit, so the timing may cross a period end.

Which records make GST on refunds and lost chargebacks easy for your accountant?

A dated, one-line record for every refund and every dispute, matched to the Shopify payout detail. Your accountant needs the order, the GST-inclusive price, the amount returned or taken, the date it actually left your account and the outcome. With those, any answer to the questions above can be applied in minutes.

Record	What to capture	Where it comes from
Original sale	Order number, date, GST-inclusive price, shipping	Shopify order
Refund	Amount, date paid, method, reason	Shopify refund and payout detail
Dispute opened	Date, amount, fee, reason	Payout detail notice
Evidence submitted	Date	Dispute page
Outcome	Won, lost or accepted, and the date	Dispute page and payout detail
Return	Whether goods came back, date, condition	Your returns log
Payout	Gross, fees, net, adjustment lines	Payout CSV (Amount, Fee, Net)

GST RECORD, ONE LINE PER EVENT
[ ] Order number and original sale date
[ ] GST-inclusive price and shipping charged
[ ] Event: refund / chargeback opened / chargeback lost / chargeback won
[ ] Amount moved and the date it left or entered your account
[ ] Chargeback fee shown on the payout detail ("chargeback_fee" adjustment)
[ ] Were the goods returned? Date received?
[ ] Payout date and payout reference the event appeared in
[ ] Your accounting method for the period (ask your agent to confirm)
[ ] Note for the agent: anything unusual about this order

How do you reconcile Shopify payouts to your BAS?

Do not report payout totals as sales. A payout is net of processing fees, refunds, chargebacks and adjustments, so it is a smaller and messier number than your takings. Shopify's lower or missing payouts page says chargebacks deduct the amount plus fees, refunds come out of the next payout, and a negative balance reduces the payout. Start from orders and refunds, then use the payout CSV to check that the money agrees.

Illustration: one month, reconciled. A store takes A$9,460.00 GST-inclusive across 118 orders in the month. At the standard online card rate of 1.7% plus 30 cents for the Basic plan, processing costs A$196.22 (1.7% of A$9,460.00 is A$160.82, and 118 orders at 30 cents is A$35.40). Three refunds total A$462.00. One chargeback is lost on an A$220.00 order with A$15.00 shipping, so Shopify recovers A$235.00, plus the reported A$25.00 fee. Check the rate for your own plan on Shopify's Australian pricing page.

Line	Amount
Sales, GST-inclusive	A$9,460.00
Processing fees	minus A$196.22
Refunds	minus A$462.00
Lost chargeback, amount recovered	minus A$235.00
Chargeback fee (reported, unconfirmed)	minus A$25.00
Payout	A$8,541.78

The payout is A$9,460.00 less A$196.22 gives A$9,263.78, less A$462.00 gives A$8,801.78, less A$235.00 gives A$8,566.78, less A$25.00 gives A$8,541.78. If every sale was a standard taxable sale, the GST in A$9,460.00 is A$860.00 (A$9,460.00 divided by 11), and the GST in the A$462.00 of refunds is A$42.00. The refunds are the part the ATO's adjustment rules cover, so the GST adjustment for them is A$42.00 once the customers have been reimbursed. The A$235.00 recovered on the lost chargeback contains about A$21.36 of GST at the same one-eleventh arithmetic, but whether it is adjusted is the open question, so put it in your agent's email rather than on the statement. The payout of A$8,541.78 is not a sales figure, and reporting it as one would understate sales.

What about the GST on Shopify's fees?

We do not know. The pages we opened give no GST detail for the chargeback fee, the Australian terms name a Singapore company as the provider, and the pricing page lists card rates but no dispute fee. Check the invoice or billing record Shopify gives you, and ask your agent whether any GST is included and whether you can claim a credit. Do not assume either way.

How do dates and quarters change the picture?

Timing is the part of GST on refunds that trips people up, and it is even more awkward with a lost chargeback, because the decision date is set by the bank, not by you. A dispute can open in one period and be decided in another, so the same order can touch two statements. Shopify's pages say the bank can take up to 75 days after you submit. With a dispute opened in late October, the decision can fall after the quarter ends, and your record needs to show both dates.

Date	Event	Why it matters for records
Tue 20 Oct 2026	Chargeback opened on an A$220.00 order, A$15.00 shipping	Amount and fee leave your balance
Fri 30 Oct 2026	Evidence submitted	Evidence is not editable after "Submit now"
Thu 31 Dec 2026	End of the calendar quarter October to December	A decision before this date lands in this quarter
Wed 13 Jan 2027	Latest bank decision, 75 days after submitting	Could land in the next quarter

The 75 days run from Friday 30 October 2026 to Wednesday 13 January 2027. If you win, the amount and fee come back per Shopify's resolve page, and the bank can re-dispute a win with a new deadline. We could not confirm how weekends and public holidays affect due dates, so submit early. Our guides to the Shopify chargeback deadline and to responding to a Shopify Payments dispute cover the process.

Does a lost chargeback change what you tell your agent?

Yes, it adds dates. A lost chargeback has an opening date, a decision date and a fee, and your agent needs all three. Treat GST on chargebacks as a question to ask once per incident, in writing, rather than a rule to apply from memory.

Should you accept or fight with tax in mind?

Decide on the evidence. Accepting means the amount goes to the customer and the fee is not returned, per Shopify. Fighting may win the money back or not, and the outcome decides your record. The tax position is a reason to keep good notes, not a reason to choose either path. Our accept or fight guide lays out the decision.

How do consumer law and refund policy affect your refunds?

They decide whether you owe a refund in the first place, and in what form. The ACCC says a major problem means a full refund to the original payment form, while for a minor problem the seller chooses repair, replace or refund. Change of mind gives no right unless your policy offers one. A "no refunds" sign cannot deny these rights.

Situation	Refund position	Source
Major problem	Full refund to the original payment form	ACCC
Minor problem	Seller chooses repair, replace or refund	ACCC
Change of mind	No right unless your policy offers one	ACCC
Return costs for a confirmed problem	Reimbursed	ACCC
"No refunds" sign	Cannot deny consumer rights	ACCC

A refund you owe under consumer law is the straightforward case for the ATO's adjustment rules: the sale is cancelled and you reimburse the customer. Our posts on major vs minor failures, change of mind refunds and writing a refund policy explain what to write down. When a customer opens a dispute instead, see refunding a customer who opened a dispute.

How should you prepare to ask about GST on chargebacks and refunds?

Bring facts, not stories. A registered tax agent can answer a question about GST on chargebacks in minutes when the dates, amounts and outcome are in front of them, and in days when they are not. Prepare one page per quarter, with refunds on one side and disputes on the other, and add a short note for anything unusual.

Scenario	What to record	ATO page position
Goods returned, full refund	Original price, refund amount, date paid	Covered: a cancelled taxable sale
Discount or rebate after the sale	Original price, new price, date	Covered: a changed sale price
Partial refund for a fault	Amount refunded and reason	Ask your agent; no worked example found
Shipping refunded on its own	Amount and date	Ask your agent; no worked example found
Lost chargeback, goods not returned	Dispute dates, amount, fee, evidence	Not mentioned: ask your agent
Lost chargeback, goods returned	As above, plus return date and condition	Not mentioned: ask your agent
Won dispute, money returned	Date the money returned	Not mentioned: ask your agent

Illustration: a quarter in one page. In the October to December 2026 quarter, you issue four refunds of A$132.00, A$66.00, A$99.00 and A$165.00, which total A$462.00. At one eleventh, the GST in them is A$12.00, A$6.00, A$9.00 and A$15.00, which total A$42.00. You also have two disputes: one lost for A$235.00, and one won for A$180.00 that returned on Wednesday 13 January 2027, after the quarter ended. Put the four refunds in one list, the two disputes in another, and write the dates next to each. Your agent can see at a glance that the lost chargeback and the won dispute are the open questions, and that the refunds follow the ATO rule.

Two habits make this easier. First, close the books on refunds each month, so nothing is left to the last week. Second, keep the reason for every refund. A refund for a faulty product, a refund after a delivery failure and a goodwill refund can look the same in Shopify, and your agent may want to know which is which.

Does your refund policy change the GST position?

It changes whether you owe the refund, and so how often you will be recording one. It does not change the ATO rule on reporting once you have refunded. Our post on no refunds signs in Australia explains why you cannot use a sign to deny consumer rights, and a clear policy shown at checkout also helps in a dispute, because it is part of the evidence you submit.

What's different for Australian merchants?

GST is an Australian concept, so most of this guide is specific to you. The practical differences are the ATO adjustment rules, Shopify's Singapore-based provider entity, payout timing that skips public holidays, and an unconfirmed Australian dispute fee. Each affects either the period your entries fall in or the numbers you can state.

ATO rules. The adjustments page was last updated on 14 September 2026 and covers refunds, not chargebacks.
Provider. The Australian Shopify Payments terms name Shopify Commerce Singapore Pte. Ltd., which is a reason to ask your agent about fee invoices.
Fees. The A$25 figure is third-party and also NAB's own merchant fee. Confirm Shopify's fee with Support.
Payout calendar. The Australian minimum is 2 business days, with no payouts on weekends or public holidays, so a refund or dispute near Christmas can land in a different period from where you expect. In 2026 Christmas Day falls on Friday 25 December and Boxing Day on Saturday 26 December.
Cardholder time. NAB's guide gives cardholders 120 days for Visa and Mastercard (varying by reason code) and 210 days for eftpos, so disputes can reach back across several quarters.

What are the most common mistakes with GST on refunds and lost chargebacks?

The biggest is reporting payouts instead of sales. The next is reporting a refund before the customer has been reimbursed, which the ATO says to avoid, and the third is guessing about lost chargebacks instead of asking. All three are avoided by good records and one email to your agent.

Reporting the payout as sales. Payouts are net of fees, refunds and disputes.
Reporting before reimbursing. The ATO says to reimburse the customer first.
Ignoring the payment date on a cash basis. The period depends on when you pay.
Splitting refunds without a note. Instalments can fall in different periods.
Guessing on lost chargebacks. The ATO page we read does not cover them.
Assuming the fee carries GST. We found no source either way.
Refunding to a bank account. NAB warns this risks a double refund.
Recording a win on the day you submit. Record it when the money returns.

Frequently asked questions

Is a refund to a customer an adjustment for GST?

Yes, where a taxable sale is cancelled. The ATO's adjustments page gives the example of a customer returning goods and you refunding the price. You must reimburse the customer before reporting a decreasing adjustment on a sale. Ask your tax agent how it applies to your accounting method and reporting period.

When do I report a refund on my BAS?

The ATO says you generally report an adjustment in the activity statement for the period in which you become aware of the need for it. On a cash basis, you adjust in the period in which you make the payment. A partial payment adjusts only for the amount actually paid in that period.

Do I adjust GST when I lose a chargeback?

We cannot say. The ATO adjustments page we read does not mention chargebacks or card disputes, and we found no other ATO source on the point. Treatment may depend on facts such as whether goods were returned. Give your registered tax agent the order, dates and amounts, and ask in writing.

Is the chargeback fee GST-inclusive?

We could not confirm it. Shopify's pricing page lists card rates but no dispute fee, and the A$25 figure is a third-party number that is also NAB's own merchant fee. Check the billing record Shopify provides and ask your tax agent whether any GST is included and whether a credit is available.

Should I report my Shopify payout as sales?

No. A payout is net of processing fees, refunds, chargebacks and adjustments, according to Shopify's payouts pages. Report from your orders and refunds, and use the payout CSV with its Amount, Fee and Net columns to check that the money agrees. Your agent can tell you how your software handles it.

What if I refund part of an order?

The ATO lists a changed sale price as an adjustment event and deals with partial payments on a cash basis, adjusting only for the amount actually paid in that period. We did not find a worked partial-refund example, so record the original price, the amount refunded and the date, and ask your agent.

Can I refund a customer while a chargeback is open?

No. Shopify's resolve page says no refund is possible while a chargeback is open, and the cardholder must drop it first, which needs a letter from their bank with the case number. A refund can stop an inquiry from becoming a chargeback only if it is a full refund. Check the dispute type first.

What happens to GST if I win the dispute later?

Shopify's resolve page says a win returns the amount plus the fee. Whether and how that reverses an earlier entry is a question for your tax agent, so include it in your email. Record the win on the date the money actually returns, which can be up to 75 days after you submit.

How long should I keep these records?

We did not verify a record-keeping period for this guide, and the pages we read do not state one. Ask your tax agent how long to keep them. Because cardholders can dispute a sale for 120 days or longer, and some reports are accepted later, keeping order and payout records for years is a sensible default.

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GST on refunds and lost chargebacks: what Australian sellers can and cannot say