diff --git a/erpnext/controllers/buying_controller.py b/erpnext/controllers/buying_controller.py
index a3c30a78d76..98799296854 100644
--- a/erpnext/controllers/buying_controller.py
+++ b/erpnext/controllers/buying_controller.py
@@ -417,20 +417,21 @@ class BuyingController(SubcontractingController):
 		stock_and_asset_items_qty, stock_and_asset_items_amount = 0, 0
 		last_item_idx = 1
 		for d in self.get("items"):
-			if d.item_code and d.item_code in stock_and_asset_items:
+			if d.item_code:
 				stock_and_asset_items_qty += flt(d.qty)
 				stock_and_asset_items_amount += flt(d.base_net_amount)
 
 			last_item_idx = d.idx
 
 		tax_accounts, total_valuation_amount, total_actual_tax_amount = self.get_tax_details()
+		remaining_amount = total_actual_tax_amount
 
 		for i, item in enumerate(self.get("items")):
 			if item.item_code and (item.qty or item.get("rejected_qty")):
 				item_tax_amount, actual_tax_amount = 0.0, 0.0
 				if i == (last_item_idx - 1):
 					item_tax_amount = total_valuation_amount
-					actual_tax_amount = total_actual_tax_amount
+					actual_tax_amount = remaining_amount
 				else:
 					# calculate item tax amount
 					item_tax_amount = self.get_item_tax_amount(item, tax_accounts)
@@ -443,7 +444,8 @@ class BuyingController(SubcontractingController):
 							stock_and_asset_items_amount,
 							stock_and_asset_items_qty,
 						)
-						total_actual_tax_amount -= actual_tax_amount
+
+						remaining_amount -= actual_tax_amount
 
 				# This code is required here to calculate the correct valuation for stock items
 				if item.item_code not in stock_and_asset_items:
diff --git a/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py b/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
index 96280d00a05..4500a9fbe79 100644
--- a/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
+++ b/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
@@ -1333,6 +1333,73 @@ class TestPurchaseReceipt(ERPNextTestSuite):
 
 		pr.delete()
 
+	def test_valuation_tax_distribution_with_non_stock_item(self):
+		"""A "Valuation and Total" tax is distributed across all items by net amount, but only
+		stock/asset items can carry valuation. For a document with 2 stock items + 1 service
+		item (each net 100) and a 30 valuation tax, each item's share is 10; only the two stock
+		items capitalize their share (20 total), so the non-stock item's 10 share must not be
+		capitalized onto the stock items."""
+		company = "_Test Company with perpetual inventory"
+		warehouse = "Stores - TCP1"
+
+		stock_item1 = make_item(properties={"is_stock_item": 1}).name
+		stock_item2 = make_item(properties={"is_stock_item": 1}).name
+		service_item = make_item(properties={"is_stock_item": 0}).name
+
+		pr = frappe.new_doc("Purchase Receipt")
+		pr.company = company
+		pr.supplier = "_Test Supplier"
+		pr.currency = "INR"
+		# Order matters: stock, service, stock (service item in the middle)
+		for code in (stock_item1, service_item, stock_item2):
+			pr.append(
+				"items",
+				{
+					"item_code": code,
+					"qty": 1,
+					"rate": 100,
+					"warehouse": warehouse,
+					"cost_center": "Main - TCP1",
+					"expense_account": "Cost of Goods Sold - TCP1",
+				},
+			)
+
+		pr.append(
+			"taxes",
+			{
+				"charge_type": "Actual",
+				"account_head": "_Test Account Shipping Charges - TCP1",
+				"category": "Valuation and Total",
+				"cost_center": "Main - TCP1",
+				"description": "Valuation Tax",
+				"tax_amount": 30,
+			},
+		)
+
+		pr.insert()
+
+		# 30 tax / 300 net = 10 per item. The two stock items capitalize 10 each; the service
+		# item's 10 share is excluded from valuation (not dumped onto the stock items).
+		self.assertAlmostEqual(pr.items[0].item_tax_amount, 10.0, places=2)
+		self.assertAlmostEqual(pr.items[1].item_tax_amount, 0.0, places=2)
+		self.assertAlmostEqual(pr.items[2].item_tax_amount, 10.0, places=2)
+		self.assertAlmostEqual(pr.items[0].valuation_rate, 110.0, places=2)
+		self.assertAlmostEqual(pr.items[2].valuation_rate, 110.0, places=2)
+
+		pr.submit()
+
+		gl_entries = get_gl_entries("Purchase Receipt", pr.name, skip_cancelled=True, as_dict=True)
+		gl_map = {row.account: row for row in gl_entries}
+
+		warehouse_account = get_warehouse_account_map(company)
+		stock_account = warehouse_account[warehouse]["account"]
+
+		# Stock asset = 200 (goods) + 20 (stock items' share of the valuation tax)
+		self.assertAlmostEqual(gl_map[stock_account].debit, 220.0, places=2)
+		self.assertAlmostEqual(gl_map["Stock Received But Not Billed - TCP1"].credit, 200.0, places=2)
+		# Only the stock items' share (20) is capitalized; the service item's 10 is excluded
+		self.assertAlmostEqual(gl_map["_Test Account Shipping Charges - TCP1"].credit, 20.0, places=2)
+
 	def test_po_to_pi_and_po_to_pr_worflow_full(self):
 		"""Test following behaviour:
 		- Create PO