diff --git a/erpnext/accounts/doctype/purchase_invoice/test_purchase_invoice.py b/erpnext/accounts/doctype/purchase_invoice/test_purchase_invoice.py
index 42eb018078..45bddfc096 100644
--- a/erpnext/accounts/doctype/purchase_invoice/test_purchase_invoice.py
+++ b/erpnext/accounts/doctype/purchase_invoice/test_purchase_invoice.py
@@ -642,13 +642,6 @@ class TestPurchaseInvoice(unittest.TestCase, StockTestMixin):
 			gle_filters={"account": "Stock In Hand - TCP1"},
 		)
 
-		# assert loss booked in COGS
-		self.assertGLEs(
-			return_pi,
-			[{"credit": 0, "debit": 200}],
-			gle_filters={"account": "Cost of Goods Sold - TCP1"},
-		)
-
 	def test_return_with_lcv(self):
 		from erpnext.controllers.sales_and_purchase_return import make_return_doc
 		from erpnext.stock.doctype.landed_cost_voucher.test_landed_cost_voucher import (
@@ -1671,6 +1664,21 @@ class TestPurchaseInvoice(unittest.TestCase, StockTestMixin):
 
 		self.assertTrue(return_pi.docstatus == 1)
 
+	def test_gl_entries_for_standalone_debit_note(self):
+		make_purchase_invoice(qty=5, rate=500, update_stock=True)
+
+		returned_inv = make_purchase_invoice(qty=-5, rate=5, update_stock=True, is_return=True)
+
+		# override the rate with valuation rate
+		sle = frappe.get_all(
+			"Stock Ledger Entry",
+			fields=["stock_value_difference", "actual_qty"],
+			filters={"voucher_no": returned_inv.name},
+		)[0]
+
+		rate = flt(sle.stock_value_difference) / flt(sle.actual_qty)
+		self.assertAlmostEqual(returned_inv.items[0].rate, rate)
+
 
 def check_gl_entries(doc, voucher_no, expected_gle, posting_date):
 	gl_entries = frappe.db.sql(
diff --git a/erpnext/controllers/buying_controller.py b/erpnext/controllers/buying_controller.py
index cf26baefb5..a3a1461c9a 100644
--- a/erpnext/controllers/buying_controller.py
+++ b/erpnext/controllers/buying_controller.py
@@ -105,6 +105,8 @@ class BuyingController(SubcontractingController):
 	def set_rate_for_standalone_debit_note(self):
 		if self.get("is_return") and self.get("update_stock") and not self.return_against:
 			for row in self.items:
+
+				# override the rate with valuation rate
 				row.rate = get_incoming_rate(
 					{
 						"item_code": row.item_code,