diff --git a/erpnext/controllers/accounts_controller.py b/erpnext/controllers/accounts_controller.py
index 3091193b8d..791b932695 100644
--- a/erpnext/controllers/accounts_controller.py
+++ b/erpnext/controllers/accounts_controller.py
@@ -19,7 +19,7 @@ from erpnext.accounts.doctype.pricing_rule.utils import (apply_pricing_rule_on_t
 from erpnext.exceptions import InvalidCurrency
 from six import text_type
 from erpnext.accounts.doctype.accounting_dimension.accounting_dimension import get_accounting_dimensions
-from erpnext.stock.get_item_details import get_item_warehouse
+from erpnext.stock.get_item_details import get_item_warehouse, _get_item_tax_template, get_item_tax_map
 from erpnext.stock.doctype.packed_item.packed_item import make_packing_list
 
 force_item_fields = ("item_group", "brand", "stock_uom", "is_fixed_asset", "item_tax_rate", "pricing_rules")
@@ -1157,6 +1157,18 @@ def get_supplier_block_status(party_name):
 	}
 	return info
 
+def set_child_tax_template_and_map(item, child_item, parent_doc):
+	args = {
+			'item_code': item.item_code,
+			'posting_date': parent_doc.transaction_date,
+			'tax_category': parent_doc.get('tax_category'),
+			'company': parent_doc.get('company')
+		}
+
+	child_item.item_tax_template = _get_item_tax_template(args, item.taxes)
+	if child_item.get("item_tax_template"):
+		child_item.item_tax_rate = get_item_tax_map(parent_doc.get('company'), child_item.item_tax_template, as_json=True)
+
 def set_sales_order_defaults(parent_doctype, parent_doctype_name, child_docname, trans_item):
 	"""
 	Returns a Sales Order Item child item containing the default values
@@ -1170,6 +1182,7 @@ def set_sales_order_defaults(parent_doctype, parent_doctype_name, child_docname,
 	child_item.delivery_date = trans_item.get('delivery_date') or p_doc.delivery_date
 	child_item.conversion_factor = flt(trans_item.get('conversion_factor')) or get_conversion_factor(item.item_code, item.stock_uom).get("conversion_factor") or 1.0
 	child_item.uom = item.stock_uom
+	set_child_tax_template_and_map(item, child_item, p_doc)
 	child_item.warehouse = get_item_warehouse(item, p_doc, overwrite_warehouse=True)
 	if not child_item.warehouse:
 		frappe.throw(_("Cannot find {} for item {}. Please set the same in Item Master or Stock Settings.")
@@ -1192,6 +1205,7 @@ def set_purchase_order_defaults(parent_doctype, parent_doctype_name, child_docna
 	child_item.uom = item.stock_uom
 	child_item.base_rate = 1 # Initiallize value will update in parent validation
 	child_item.base_amount = 1 # Initiallize value will update in parent validation
+	set_child_tax_template_and_map(item, child_item, p_doc)
 	return child_item
 
 def check_and_delete_children(parent, data):
diff --git a/erpnext/controllers/taxes_and_totals.py b/erpnext/controllers/taxes_and_totals.py
index 2a14be8532..59c60f7fdc 100644
--- a/erpnext/controllers/taxes_and_totals.py
+++ b/erpnext/controllers/taxes_and_totals.py
@@ -209,7 +209,7 @@ class calculate_taxes_and_totals(object):
 			elif tax.charge_type == "On Previous Row Total":
 				current_tax_fraction = (tax_rate / 100.0) * \
 					self.doc.get("taxes")[cint(tax.row_id) - 1].grand_total_fraction_for_current_item
-			
+
 			elif tax.charge_type == "On Item Quantity":
 				inclusive_tax_amount_per_qty = flt(tax_rate)
 
@@ -220,10 +220,14 @@ class calculate_taxes_and_totals(object):
 		return current_tax_fraction, inclusive_tax_amount_per_qty
 
 	def _get_tax_rate(self, tax, item_tax_map):
-		if tax.account_head in item_tax_map:
-			return flt(item_tax_map.get(tax.account_head), self.doc.precision("rate", tax))
+		if item_tax_map:
+			if tax.account_head in item_tax_map:
+				return flt(item_tax_map.get(tax.account_head), self.doc.precision("rate", tax))
+			else:
+				return tax.rate
 		else:
-			return tax.rate
+			# If no item tax template against item dont calculate tax against it
+			return 0
 
 	def calculate_net_total(self):
 		self.doc.total_qty = self.doc.total = self.doc.base_total = self.doc.net_total = self.doc.base_net_total = 0.0
diff --git a/erpnext/public/js/controllers/taxes_and_totals.js b/erpnext/public/js/controllers/taxes_and_totals.js
index 6951539026..9659124960 100644
--- a/erpnext/public/js/controllers/taxes_and_totals.js
+++ b/erpnext/public/js/controllers/taxes_and_totals.js
@@ -223,8 +223,13 @@ erpnext.taxes_and_totals = erpnext.payments.extend({
 	},
 
 	_get_tax_rate: function(tax, item_tax_map) {
-		return (Object.keys(item_tax_map).indexOf(tax.account_head) != -1) ?
-			flt(item_tax_map[tax.account_head], precision("rate", tax)) : tax.rate;
+		if(!$.isEmptyObject(item_tax_map)) {
+			return (Object.keys(item_tax_map).indexOf(tax.account_head) != -1) ?
+				flt(item_tax_map[tax.account_head], precision("rate", tax)) : tax.rate;
+		} else {
+			// If no item tax template against item dont calculate tax against it
+			return 0
+		}
 	},
 
 	calculate_net_total: function() {
@@ -595,7 +600,7 @@ erpnext.taxes_and_totals = erpnext.payments.extend({
 			$.each(actual_taxes_dict, function(key, value) {
 				if (value) total_actual_tax += value;
 			});
-			
+
 			return flt(this.frm.doc.grand_total - total_actual_tax, precision("grand_total"));
 		}
 	},