diff --git a/erpnext/manufacturing/doctype/bom/bom.js b/erpnext/manufacturing/doctype/bom/bom.js
index a09a5e34300..5cdd1373913 100644
--- a/erpnext/manufacturing/doctype/bom/bom.js
+++ b/erpnext/manufacturing/doctype/bom/bom.js
@@ -360,6 +360,14 @@ frappe.ui.form.on("BOM", {
 	}
 });
 
+function set_is_process_loss(doc, cdt, cdn) {
+	const row = locals[cdt][cdn]
+	if (row.item_code === doc.item) {
+		row.is_process_loss = 1
+		frappe.msgprint(__("Item:") + ` ${row.item_code} ` + __("set as process loss."))
+	}
+}
+
 erpnext.bom.BomController = erpnext.TransactionController.extend({
 	conversion_rate: function(doc) {
 		if(this.frm.doc.currency === this.get_company_currency()) {
@@ -380,6 +388,9 @@ erpnext.bom.BomController = erpnext.TransactionController.extend({
 			child.bom_no = '';
 		}
 
+		if (scrap_items) {
+			set_is_process_loss(doc, cdt, cdn)
+		}
 		get_bom_material_detail(doc, cdt, cdn, scrap_items);
 	},
 
@@ -447,6 +458,10 @@ var get_bom_material_detail = function(doc, cdt, cdn, scrap_items) {
 			},
 			callback: function(r) {
 				d = locals[cdt][cdn];
+				if (d.is_process_loss) {
+					r.message.rate = 0
+					r.message.base_rate = 0
+				}
 				$.extend(d, r.message);
 				refresh_field("items");
 				refresh_field("scrap_items");
diff --git a/erpnext/manufacturing/doctype/bom/bom.py b/erpnext/manufacturing/doctype/bom/bom.py
index 00e79d4f091..3402a6b3489 100644
--- a/erpnext/manufacturing/doctype/bom/bom.py
+++ b/erpnext/manufacturing/doctype/bom/bom.py
@@ -81,6 +81,7 @@ class BOM(WebsiteGenerator):
 		self.validate_operations()
 		self.calculate_cost()
 		self.update_stock_qty()
+		self.validate_scrap_items()
 		self.update_cost(update_parent=False, from_child_bom=True, save=False)
 
 	def get_context(self, context):
@@ -585,6 +586,15 @@ class BOM(WebsiteGenerator):
 				if not d.batch_size or d.batch_size <= 0:
 					d.batch_size = 1
 
+	def validate_scrap_items(self):
+		for item in self.scrap_items:
+			if item.item_code == self.item and not item.is_process_loss:
+				frappe.throw(_('Item:') + f' {item.item_code} ' +\
+					_('in Scrap/Loss Items table should have Is Process Loss checked.'))
+			elif item.item_code != self.item and item.is_process_loss:
+				frappe.throw(_('Item:') + f' {item.item_code} ' +\
+					_('in Scrap/Loss Items table should not have Is Process Loss checked.'))
+
 def get_bom_item_rate(args, bom_doc):
 	if bom_doc.rm_cost_as_per == 'Valuation Rate':
 		rate = get_valuation_rate(args) * (args.get("conversion_factor") or 1)