diff --git a/erpnext/selling/doctype/sales_order/test_sales_order.py b/erpnext/selling/doctype/sales_order/test_sales_order.py
index 87b181f4e99e7e497573b43ae734f91063b821d1..16e4a15a021a5523416d4bf256cea18303571a96 100644
--- a/erpnext/selling/doctype/sales_order/test_sales_order.py
+++ b/erpnext/selling/doctype/sales_order/test_sales_order.py
@@ -2090,6 +2090,40 @@ class TestSalesOrder(FrappeTestCase):
 		dn.submit()
 		dn.reload()
 
+	def test_auto_update_price_list(self):
+		item = make_item(
+			"_Test Auto Update Price List Item",
+		)
+
+		frappe.db.set_single_value("Stock Settings", "auto_insert_price_list_rate_if_missing", 1)
+		so = make_sales_order(
+			item_code=item.name, currency="USD", qty=1, rate=100, price_list_rate=100, do_not_submit=True
+		)
+		so.save()
+
+		item_price = frappe.db.get_value("Item Price", {"item_code": item.name}, "price_list_rate")
+		self.assertEqual(item_price, 100)
+
+		so = make_sales_order(
+			item_code=item.name, currency="USD", qty=1, rate=200, price_list_rate=100, do_not_submit=True
+		)
+		so.save()
+
+		item_price = frappe.db.get_value("Item Price", {"item_code": item.name}, "price_list_rate")
+		self.assertEqual(item_price, 100)
+
+		frappe.db.set_single_value("Stock Settings", "update_existing_price_list_rate", 1)
+		so = make_sales_order(
+			item_code=item.name, currency="USD", qty=1, rate=200, price_list_rate=200, do_not_submit=True
+		)
+		so.save()
+
+		item_price = frappe.db.get_value("Item Price", {"item_code": item.name}, "price_list_rate")
+		self.assertEqual(item_price, 200)
+
+		frappe.db.set_single_value("Stock Settings", "update_existing_price_list_rate", 0)
+		frappe.db.set_single_value("Stock Settings", "auto_insert_price_list_rate_if_missing", 0)
+
 
 def automatically_fetch_payment_terms(enable=1):
 	accounts_settings = frappe.get_doc("Accounts Settings")
diff --git a/erpnext/stock/get_item_details.py b/erpnext/stock/get_item_details.py
index 1f507d6b57ddab7531f44e0039485d77052a86a4..4e53d8805ddfd4c73181da5402fe029e64b972f7 100644
--- a/erpnext/stock/get_item_details.py
+++ b/erpnext/stock/get_item_details.py
@@ -843,7 +843,9 @@ def get_price_list_rate(args, item_doc, out=None):
 			price_list_rate = get_price_list_rate_for(args, item_doc.variant_of)
 
 		# insert in database
-		if price_list_rate is None:
+		if price_list_rate is None or frappe.db.get_single_value(
+			"Stock Settings", "update_existing_price_list_rate"
+		):
 			if args.price_list and args.rate:
 				insert_item_price(args)
 			return out