diff --git a/erpnext/accounts/doctype/pos_invoice/pos_invoice.py b/erpnext/accounts/doctype/pos_invoice/pos_invoice.py
index f66abdc..97d34e0 100644
--- a/erpnext/accounts/doctype/pos_invoice/pos_invoice.py
+++ b/erpnext/accounts/doctype/pos_invoice/pos_invoice.py
@@ -42,7 +42,6 @@
 		self.validate_serialised_or_batched_item()
 		self.validate_stock_availablility()
 		self.validate_return_items_qty()
-		self.validate_non_stock_items()
 		self.set_status()
 		self.set_account_for_mode_of_payment()
 		self.validate_pos()
@@ -175,9 +174,11 @@
 	def validate_stock_availablility(self):
 		if self.is_return or self.docstatus != 1:
 			return
-
 		allow_negative_stock = frappe.db.get_single_value('Stock Settings', 'allow_negative_stock')
 		for d in self.get('items'):
+			is_service_item = not (frappe.db.get_value('Item', d.get('item_code'), 'is_stock_item'))
+			if is_service_item:
+				return
 			if d.serial_no:
 				self.validate_pos_reserved_serial_nos(d)
 				self.validate_delivered_serial_nos(d)
@@ -188,7 +189,7 @@
 				if allow_negative_stock:
 					return
 
-				available_stock = get_stock_availability(d.item_code, d.warehouse)
+				available_stock, is_stock_item = get_stock_availability(d.item_code, d.warehouse)
 
 				item_code, warehouse, qty = frappe.bold(d.item_code), frappe.bold(d.warehouse), frappe.bold(d.qty)
 				if flt(available_stock) <= 0:
@@ -259,14 +260,6 @@
 							.format(d.idx, bold_serial_no, bold_return_against)
 						)
 
-	def validate_non_stock_items(self):
-		for d in self.get("items"):
-			is_stock_item = frappe.get_cached_value("Item", d.get("item_code"), "is_stock_item")
-			if not is_stock_item:
-				if not frappe.db.exists('Product Bundle', d.item_code):
-					frappe.throw(_("Row #{}: Item {} is a non stock item. You can only include stock items in a POS Invoice.")
-						.format(d.idx, frappe.bold(d.item_code)), title=_("Invalid Item"))
-
 	def validate_mode_of_payment(self):
 		if len(self.payments) == 0:
 			frappe.throw(_("At least one mode of payment is required for POS invoice."))
@@ -506,12 +499,18 @@
 @frappe.whitelist()
 def get_stock_availability(item_code, warehouse):
 	if frappe.db.get_value('Item', item_code, 'is_stock_item'):
+		is_stock_item = True
 		bin_qty = get_bin_qty(item_code, warehouse)
 		pos_sales_qty = get_pos_reserved_qty(item_code, warehouse)
-		return bin_qty - pos_sales_qty
+		return bin_qty - pos_sales_qty, is_stock_item
 	else:
+		is_stock_item = False
 		if frappe.db.exists('Product Bundle', item_code):
-			return get_bundle_availability(item_code, warehouse)
+			return get_bundle_availability(item_code, warehouse), is_stock_item
+		else:
+			# Is a service item
+			return 0, is_stock_item
+
 
 def get_bundle_availability(bundle_item_code, warehouse):
 	product_bundle = frappe.get_doc('Product Bundle', bundle_item_code)
diff --git a/erpnext/selling/page/point_of_sale/point_of_sale.py b/erpnext/selling/page/point_of_sale/point_of_sale.py
index db5b20e..993c61d 100644
--- a/erpnext/selling/page/point_of_sale/point_of_sale.py
+++ b/erpnext/selling/page/point_of_sale/point_of_sale.py
@@ -24,7 +24,7 @@
 			["name as item_code", "item_name", "description", "stock_uom", "image as item_image", "is_stock_item"],
 			as_dict=1)
 
-		item_stock_qty = get_stock_availability(item_code, warehouse)
+		item_stock_qty, is_stock_item = get_stock_availability(item_code, warehouse)
 		price_list_rate, currency = frappe.db.get_value('Item Price', {
 			'price_list': price_list,
 			'item_code': item_code
@@ -99,7 +99,6 @@
 		), {'warehouse': warehouse}, as_dict=1)
 
 	if items_data:
-		items_data = filter_service_items(items_data)
 		items = [d.item_code for d in items_data]
 		item_prices_data = frappe.get_all("Item Price",
 			fields = ["item_code", "price_list_rate", "currency"],
@@ -112,7 +111,7 @@
 		for item in items_data:
 			item_code = item.item_code
 			item_price = item_prices.get(item_code) or {}
-			item_stock_qty = get_stock_availability(item_code, warehouse)
+			item_stock_qty, is_stock_item = get_stock_availability(item_code, warehouse)
 
 			row = {}
 			row.update(item)
@@ -144,14 +143,6 @@
 
 	return {}
 
-def filter_service_items(items):
-	for item in items:
-		if not item['is_stock_item']:
-			if not frappe.db.exists('Product Bundle', item['item_code']):
-				items.remove(item)
-
-	return items
-
 def get_conditions(search_term):
 	condition = "("
 	condition += """item.name like {search_term}
diff --git a/erpnext/selling/page/point_of_sale/pos_controller.js b/erpnext/selling/page/point_of_sale/pos_controller.js
index ce74f6d..56aa24f 100644
--- a/erpnext/selling/page/point_of_sale/pos_controller.js
+++ b/erpnext/selling/page/point_of_sale/pos_controller.js
@@ -630,18 +630,24 @@
 	}
 
 	async check_stock_availability(item_row, qty_needed, warehouse) {
-		const available_qty = (await this.get_available_stock(item_row.item_code, warehouse)).message;
+		const resp = (await this.get_available_stock(item_row.item_code, warehouse)).message;
+		const available_qty = resp[0];
+		const is_stock_item = resp[1];
 
 		frappe.dom.unfreeze();
 		const bold_item_code = item_row.item_code.bold();
 		const bold_warehouse = warehouse.bold();
 		const bold_available_qty = available_qty.toString().bold()
 		if (!(available_qty > 0)) {
-			frappe.model.clear_doc(item_row.doctype, item_row.name);
-			frappe.throw({
-				title: __("Not Available"),
-				message: __('Item Code: {0} is not available under warehouse {1}.', [bold_item_code, bold_warehouse])
-			})
+			if (is_stock_item) {
+				frappe.model.clear_doc(item_row.doctype, item_row.name);
+				frappe.throw({
+					title: __("Not Available"),
+					message: __('Item Code: {0} is not available under warehouse {1}.', [bold_item_code, bold_warehouse])
+				});
+			} else {
+				return;
+			}
 		} else if (available_qty < qty_needed) {
 			frappe.throw({
 				message: __('Stock quantity not enough for Item Code: {0} under warehouse {1}. Available quantity {2}.', [bold_item_code, bold_warehouse, bold_available_qty]),
@@ -675,8 +681,8 @@
 			},
 			callback(res) {
 				if (!me.item_stock_map[item_code])
-					me.item_stock_map[item_code] = {}
-				me.item_stock_map[item_code][warehouse] = res.message;
+					me.item_stock_map[item_code] = {};
+				me.item_stock_map[item_code][warehouse] = res.message[0];
 			}
 		});
 	}
diff --git a/erpnext/selling/page/point_of_sale/pos_item_selector.js b/erpnext/selling/page/point_of_sale/pos_item_selector.js
index a30bcd7..1177615 100644
--- a/erpnext/selling/page/point_of_sale/pos_item_selector.js
+++ b/erpnext/selling/page/point_of_sale/pos_item_selector.js
@@ -79,14 +79,20 @@
 		const me = this;
 		// eslint-disable-next-line no-unused-vars
 		const { item_image, serial_no, batch_no, barcode, actual_qty, stock_uom, price_list_rate } = item;
-		const indicator_color = actual_qty > 10 ? "green" : actual_qty <= 0 ? "red" : "orange";
 		const precision = flt(price_list_rate, 2) % 1 != 0 ? 2 : 0;
-
+		let indicator_color;
 		let qty_to_display = actual_qty;
 
-		if (Math.round(qty_to_display) > 999) {
-			qty_to_display = Math.round(qty_to_display)/1000;
-			qty_to_display = qty_to_display.toFixed(1) + 'K';
+		if (item.is_stock_item) {
+			indicator_color = (actual_qty > 10 ? "green" : actual_qty <= 0 ? "red" : "orange");
+
+			if (Math.round(qty_to_display) > 999) {
+				qty_to_display = Math.round(qty_to_display)/1000;
+				qty_to_display = qty_to_display.toFixed(1) + 'K';
+			}
+		} else {
+			indicator_color = '';
+			qty_to_display = '';
 		}
 
 		function get_item_image_html() {
diff --git a/erpnext/tests/test_point_of_sale.py b/erpnext/tests/test_point_of_sale.py
new file mode 100644
index 0000000..df2dc8b
--- /dev/null
+++ b/erpnext/tests/test_point_of_sale.py
@@ -0,0 +1,53 @@
+# Copyright (c) 2022, Frappe Technologies Pvt. Ltd. and Contributors
+# MIT License. See license.txt
+
+
+from erpnext.accounts.doctype.pos_profile.test_pos_profile import make_pos_profile
+from erpnext.selling.page.point_of_sale.point_of_sale import get_items
+from erpnext.stock.doctype.item.test_item import make_item
+from erpnext.stock.doctype.stock_entry.stock_entry_utils import make_stock_entry
+from erpnext.tests.utils import ERPNextTestCase
+
+
+class TestPointOfSale(ERPNextTestCase):
+	def test_item_search(self):
+		"""
+		Test Stock and Service Item Search.
+		"""
+
+		pos_profile = make_pos_profile()
+		item1 = make_item("Test Search Stock Item", {"is_stock_item": 1})
+		make_stock_entry(
+			item_code="Test Search Stock Item",
+			qty=10,
+			to_warehouse="_Test Warehouse - _TC",
+			rate=500,
+		)
+
+		result = get_items(
+			start=0,
+			page_length=20,
+			price_list=None,
+			item_group=item1.item_group,
+			pos_profile=pos_profile.name,
+			search_term="Test Search Stock Item",
+		)
+		filtered_items = result.get("items")
+
+		self.assertEqual(len(filtered_items), 1)
+		self.assertEqual(filtered_items[0]["item_code"], item1.item_code)
+		self.assertEqual(filtered_items[0]["actual_qty"], 10)
+
+		item2 = make_item("Test Search Service Item", {"is_stock_item": 0})
+		result = get_items(
+			start=0,
+			page_length=20,
+			price_list=None,
+			item_group=item2.item_group,
+			pos_profile=pos_profile.name,
+			search_term="Test Search Service Item",
+		)
+		filtered_items = result.get("items")
+
+		self.assertEqual(len(filtered_items), 1)
+		self.assertEqual(filtered_items[0]["item_code"], item2.item_code)