Here's the answer to handling a refund from a supplier in QB Simple Start, where the refund has come through as a bank transaction. This also adjusts the GST properly.

I am NOT an accountant, so I am happy for any accountants to correct me if I am wrong, but it all worked just fine.

I guess it is not in Intuit's interest to give us the easy answer when there is an upgrade available.

Create a NEW Journal entry.

In the first line select the Account you added the expense to originally. eg. Repairs and Maintenance, add the amount of the refund as a CREDIT, add a description and select the supplier in the Name column. Make sure GST on Purchases is selected.

On the second line, in Account, select the Bank account that shows the refund. Then the amount in the DEBIT column and a description.
You can add a memo down the bottom so it shows in the GST details report easily.
Select Save and New.

Next open up banking where the refund amount is, you should see a '1 record found' in the Category or Match column. simply select Match as the Action and that is it.

To confirm, go to Reports -> GST Details. You will find the entry in the purchases section, with the taxable amount and GST adding up to the refund amount as a negative $ entry.

You can also go to Accounts -> the account you selected and open it, you will see a negative entry in there for the refund.