diff --git a/erpnext/controllers/selling_controller.py b/erpnext/controllers/selling_controller.py
index 919e459c9e21..22b0d08c92a5 100644
--- a/erpnext/controllers/selling_controller.py
+++ b/erpnext/controllers/selling_controller.py
@@ -432,6 +432,9 @@ def set_incoming_rate(self):
 
 		items = self.get("items") + (self.get("packed_items") or [])
 		for d in items:
+			if not frappe.get_cached_value("Item", d.item_code, "is_stock_item"):
+				continue
+
 			if not self.get("return_against") or (
 				get_valuation_method(d.item_code) == "Moving Average" and self.get("is_return")
 			):