I inputed a credit in payables for a refund for GST. Now that I have received the chq I don't know how to clear the payables credit for my GST vendor. I showed the chq as a misc cashed received but of course it did not clear the payable credit.

Assuming you didn't apply the credit against any invoices, enter a Payables adjustment against the credit. When you get to the part where it asks for a GL account, use the same account you used when you entered the miscellaneous cash receipt.

If you applied the credit again an invoice, then enter a debit note instead and select the invoice to which the credit was applied.

Steve