diff --git a/models/baseModels/AccountingSettings/AccountingSettings.ts b/models/baseModels/AccountingSettings/AccountingSettings.ts
index 899f5a76..ba2dd6b9 100644
--- a/models/baseModels/AccountingSettings/AccountingSettings.ts
+++ b/models/baseModels/AccountingSettings/AccountingSettings.ts
@@ -71,6 +71,9 @@ export class AccountingSettings extends Doc {
     enablePointOfSaleWithOutInventory: () => {
       return !!this.enablePointOfSaleWithOutInventory;
     },
+    enableitemGroup: () => {
+      return !!this.enableitemGroup;
+    },
   };
 
   override hidden: HiddenMap = {
diff --git a/models/baseModels/InvoiceItem/InvoiceItem.ts b/models/baseModels/InvoiceItem/InvoiceItem.ts
index 4e12e445..9eea9d76 100644
--- a/models/baseModels/InvoiceItem/InvoiceItem.ts
+++ b/models/baseModels/InvoiceItem/InvoiceItem.ts
@@ -299,11 +299,29 @@ export abstract class InvoiceItem extends Doc {
     },
     tax: {
       formula: async () => {
-        return (await this.fyo.getValue(
+        const itemTax = (await this.fyo.getValue(
           'Item',
           this.item as string,
           'tax'
         )) as string;
+
+        if (itemTax) {
+          return itemTax;
+        }
+
+        const itemGroup = (await this.fyo.getValue(
+          'Item',
+          this.item as string,
+          'itemGroup'
+        )) as string;
+
+        if (!itemGroup) {
+          return '';
+        }
+
+        const itemGroupDoc = await this.fyo.doc.getDoc('ItemGroup', itemGroup);
+
+        return itemGroupDoc?.tax as string;
       },
       dependsOn: ['item'],
     },
diff --git a/models/baseModels/Item/Item.ts b/models/baseModels/Item/Item.ts
index fb057f02..9400439e 100644
--- a/models/baseModels/Item/Item.ts
+++ b/models/baseModels/Item/Item.ts
@@ -26,6 +26,7 @@ export class Item extends Doc {
   itemType?: 'Product' | 'Service';
   for?: 'Purchases' | 'Sales' | 'Both';
   hasBatch?: boolean;
+  itemGroup?: string;
   hasSerialNumber?: boolean;
   uomConversions: UOMConversionItem[] = [];
 
@@ -63,6 +64,20 @@ export class Item extends Doc {
       },
       dependsOn: ['itemType', 'trackItem'],
     },
+    hsnCode: {
+      formula: async () => {
+        if (!this.itemGroup) {
+          return '';
+        }
+
+        const itemGroupDoc = await this.fyo.doc.getDoc(
+          'ItemGroup',
+          this.itemGroup
+        );
+        return itemGroupDoc?.hsnCode as string;
+      },
+      dependsOn: ['itemGroup'],
+    },
   };
 
   async beforeSync(): Promise<void> {
@@ -156,6 +171,7 @@ export class Item extends Doc {
       ),
     uomConversions: () =>
       !this.fyo.singles.InventorySettings?.enableUomConversions,
+    itemGroup: () => !this.fyo.singles.AccountingSettings?.enableitemGroup,
   };
 
   readOnly: ReadOnlyMap = {
diff --git a/models/baseModels/ItemGroup/ItemGroup.ts b/models/baseModels/ItemGroup/ItemGroup.ts
new file mode 100644
index 00000000..4ec1fdbc
--- /dev/null
+++ b/models/baseModels/ItemGroup/ItemGroup.ts
@@ -0,0 +1,10 @@
+import { Doc } from 'fyo/model/doc';
+import { ListViewSettings } from 'fyo/model/types';
+
+export class ItemGroup extends Doc {
+  static getListViewSettings(): ListViewSettings {
+    return {
+      columns: ['name', 'tax', 'hsnCode'],
+    };
+  }
+}
diff --git a/models/index.ts b/models/index.ts
index c4638732..2fc1aa26 100644
--- a/models/index.ts
+++ b/models/index.ts
@@ -31,6 +31,7 @@ import { SalesInvoiceItem } from './baseModels/SalesInvoiceItem/SalesInvoiceItem
 import { SalesQuote } from './baseModels/SalesQuote/SalesQuote';
 import { SalesQuoteItem } from './baseModels/SalesQuoteItem/SalesQuoteItem';
 import { SetupWizard } from './baseModels/SetupWizard/SetupWizard';
+import { ItemGroup } from './baseModels/ItemGroup/ItemGroup';
 import { Tax } from './baseModels/Tax/Tax';
 import { TaxSummary } from './baseModels/TaxSummary/TaxSummary';
 import { Batch } from './inventory/Batch';
@@ -64,6 +65,7 @@ export const models = {
   Batch,
   Defaults,
   Item,
+  ItemGroup,
   JournalEntry,
   JournalEntryAccount,
   Misc,
diff --git a/schemas/app/AccountingSettings.json b/schemas/app/AccountingSettings.json
index aa443f49..3e541c2c 100644
--- a/schemas/app/AccountingSettings.json
+++ b/schemas/app/AccountingSettings.json
@@ -135,6 +135,13 @@
       "default": false,
       "section": "Features"
     },
+    {
+      "fieldname": "enableitemGroup",
+      "label": "Enable Item Group",
+      "fieldtype": "Check",
+      "default": false,
+      "section": "Features"
+    },
     {
       "fieldname": "enablePointOfSaleWithOutInventory",
       "label": "Enable POS Without Inventory",
diff --git a/schemas/app/Item.json b/schemas/app/Item.json
index d04c6b19..79545a94 100644
--- a/schemas/app/Item.json
+++ b/schemas/app/Item.json
@@ -25,6 +25,14 @@
       "placeholder": "Item Code",
       "section": "Default"
     },
+    {
+      "fieldname": "itemGroup",
+      "label": "Item Group",
+      "fieldtype": "Link",
+      "target": "ItemGroup",
+      "create": true,
+      "placeholder": "Item Group"
+    },
     {
       "fieldname": "for",
       "label": "Purpose",
diff --git a/schemas/app/ItemGroup.json b/schemas/app/ItemGroup.json
new file mode 100644
index 00000000..6b019932
--- /dev/null
+++ b/schemas/app/ItemGroup.json
@@ -0,0 +1,31 @@
+{
+  "name": "ItemGroup",
+  "label": "item Group",
+  "naming": "manual",
+  "fields": [
+    {
+      "fieldname": "name",
+      "label": "Name",
+      "fieldtype": "Data",
+      "placeholder": "Name",
+      "section": "Default",
+      "required": true
+    },
+    {
+      "fieldname": "tax",
+      "label": "Tax",
+      "fieldtype": "Link",
+      "target": "Tax",
+      "create": true,
+      "placeholder": "Tax"
+    },
+    {
+      "fieldname": "hsnCode",
+      "label": "HSN/SAC",
+      "fieldtype": "Data",
+      "placeholder": "HSN/SAC Code"
+    }
+  ],
+  "quickEditFields": ["tax", "hsnCode"],
+  "keywordFields": ["name"]
+}
diff --git a/schemas/schemas.ts b/schemas/schemas.ts
index 99a766bc..71f26fb8 100644
--- a/schemas/schemas.ts
+++ b/schemas/schemas.ts
@@ -78,6 +78,7 @@ import ERPNextSyncSettings from './app/ERPNextSyncSettings.json';
 import ERPNextSyncQueue from './app/ERPNextSyncQueue.json';
 import FetchFromERPNextQueue from './app/FetchFromERPNextQueue.json';
 import IntegrationErrorLog from './app/IntegrationErrorLog.json';
+import ItemGroup from './app/ItemGroup.json';
 import { Schema, SchemaStub } from './types';
 
 export const coreSchemas: Schema[] = [
@@ -113,6 +114,7 @@ export const appSchemas: Schema[] | SchemaStub[] = [
   Party as Schema,
   Lead as Schema,
   Address as Schema,
+  ItemGroup as Schema,
   Item as Schema,
   UOM as Schema,
   UOMConversionItem as Schema,
diff --git a/src/components/POS/types.ts b/src/components/POS/types.ts
index 3825c798..5970c103 100644
--- a/src/components/POS/types.ts
+++ b/src/components/POS/types.ts
@@ -6,6 +6,8 @@ export type ItemQtyMap = {
 
 export type ItemSerialNumbers = { [item: string]: string };
 
+export type ItemGroupMap = Record<string, string>;
+
 export type DiscountType = 'percent' | 'amount';
 
 export const modalNames = [
@@ -26,6 +28,7 @@ export type PosEmits =
   | 'addItem'
   | 'toggleView'
   | 'toggleModal'
+  | 'setItemGroup'
   | 'setPaidAmount'
   | 'setPaymentMethod'
   | 'setCouponsCount'
@@ -50,4 +53,5 @@ export interface POSItem {
   unit: string;
   hasBatch: boolean;
   hasSerialNumber: boolean;
+  itemGroup?: string;
 }
diff --git a/src/pages/POS/ClassicPOS.vue b/src/pages/POS/ClassicPOS.vue
index 313d31e7..1deca7c6 100644
--- a/src/pages/POS/ClassicPOS.vue
+++ b/src/pages/POS/ClassicPOS.vue
@@ -103,6 +103,18 @@
               "
               @change="(item: string) => emitEvent('handleItemSearch', item)"
             />
+
+            <Link
+              :df="{
+                label: t`Filter by Group`,
+                fieldtype: 'Link',
+                fieldname: 'itemGroup',
+                target: 'ItemGroup',
+              }"
+              :border="true"
+              :value="selectedItemGroup"
+              @change="(group: string) => emitEvent('setItemGroup',group)"
+            />
           </div>
 
           <ItemsTable
@@ -348,6 +360,7 @@ import { Item } from 'models/baseModels/Item/Item';
 import CouponCodeModal from './CouponCodeModal.vue';
 import POSQuickActions from './POSQuickActions.vue';
 import { PosEmits } from 'src/components/POS/types';
+import Link from 'src/components/Controls/Link.vue';
 import SavedInvoiceModal from './SavedInvoiceModal.vue';
 import OpenPOSShiftModal from './OpenPOSShiftModal.vue';
 import ClosePOSShiftModal from './ClosePOSShiftModal.vue';
@@ -366,6 +379,7 @@ import { AppliedCouponCodes } from 'models/baseModels/AppliedCouponCodes/Applied
 export default defineComponent({
   name: 'ClassicPOS',
   components: {
+    Link,
     Button,
     ItemsGrid,
     AlertModal,
@@ -411,6 +425,10 @@ export default defineComponent({
       type: String,
       default: '',
     },
+    selectedItemGroup: {
+      type: String,
+      default: '',
+    },
     loyaltyProgram: {
       type: String,
       default: '',
@@ -442,6 +460,7 @@ export default defineComponent({
     'toggleModal',
     'setCustomer',
     'clearValues',
+    'setItemGroup',
     'setPaidAmount',
     'setCouponsCount',
     'routeToSinvList',
@@ -460,6 +479,7 @@ export default defineComponent({
   ],
   data() {
     return {
+      itemGroupFilter: '',
       additionalDiscounts: fyo.pesa(0),
     };
   },
diff --git a/src/pages/POS/POS.vue b/src/pages/POS/POS.vue
index e8da11e8..1f66d88f 100644
--- a/src/pages/POS/POS.vue
+++ b/src/pages/POS/POS.vue
@@ -19,6 +19,7 @@
       :open-alert-modal="openAlertModal"
       :default-customer="defaultCustomer"
       :item-search-term="itemSearchTerm"
+      :selected-item-group="selectedItemGroup"
       :is-pos-shift-open="isPosShiftOpen"
       :items="(items as [] as POSItem[])"
       :sinv-doc="(sinvDoc as SalesInvoice)"
@@ -40,6 +41,7 @@
       @clear-values="clearValues"
       @set-customer="setCustomer"
       @toggle-modal="toggleModal"
+      @set-item-group="setItemGroup"
       @handle-item-search="handleItemSearch"
       @set-paid-amount="setPaidAmount"
       @set-payment-method="setPaymentMethod"
@@ -214,6 +216,7 @@ export default defineComponent({
       appliedCoupons: [] as AppliedCouponCodes[],
 
       itemSearchTerm: '',
+      selectedItemGroup: '',
       paymentMethod: undefined as string | undefined,
       transferRefNo: undefined as string | undefined,
       defaultCustomer: undefined as string | undefined,
@@ -458,6 +461,10 @@ export default defineComponent({
 
       await this.afterSync();
     },
+    async setItemGroup(itemGroupName: string) {
+      this.selectedItemGroup = itemGroupName;
+      await this.setItems();
+    },
     async setItems() {
       const filters: Record<string, boolean> = {};
       const itemVisibility = this.fyo.singles.POSSettings?.itemVisibility;
@@ -470,9 +477,13 @@ export default defineComponent({
         filters.trackItem = false;
       }
 
+      const itemGroupfilter = this.selectedItemGroup
+        ? { itemGroup: this.selectedItemGroup }
+        : undefined;
+
       const items = (await fyo.db.getAll(ModelNameEnum.Item, {
         fields: [],
-        filters,
+        filters: itemGroupfilter,
       })) as Item[];
 
       this.items = [] as POSItem[];