URP demanding money back, can I deny GST component?

A business providing domestic appliance AMC is facing a customer demanding a full refund, including GST, for a cancelled contract. The business has agreed to a pro-rata refund but is unsure about refunding the GST component, which has already been deposited. Advice suggests issuing a credit note with GST and adjusting it against current sales or claiming a refund via RFD-01 if no output liability exists.