Purchase return involving sales tax

Hello Sir..!

Good day to you…

Could you kindly clarify a doubt regarding another question from Kaplan Kit 2023-24

Qn 339

Peach Co returned faulty goods to a supplier and received a credit note from the supplier.
When recording the credit note in the accounting system, Lime Co omitted to account for
sales tax and, instead posted the gross amount of $1,296 to the returns outwards account.
Both Peach Co and the supplier are registered to account for sales tax at the rate of 8%.
What journal adjustment should Peach Co make to correct this error?

A Dr Sales tax $96, and Cr Cash at bank $300
B Dr Sales tax $96, and Cr Payables $250
C Dr Sales tax $96, and Cr Returns outwards $96
D Dr Sales tax $96, and Cr Purchases $250

My understanding is that the correct entry should have been:

Dr Payables 1296
Cr Purchase return 1200
Cr Sales tax 96

But they wrongly posted:

Dr Payables 1296
Cr Purchase return 1296

To rectify this,

Dr Purchase Return 96
Cr Sales tax 96

There does not seem to be such an option..

Isn’t this the correct answer?

I would really appreciate your help. Thanks in advance.