diff --git a/erpnext/accounts/doctype/pos_customer_group/__init__.py b/erpnext/accounts/doctype/pos_customer_group/__init__.py
new file mode 100644
index 0000000..e69de29
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_customer_group/__init__.py
diff --git a/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.json b/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.json
new file mode 100644
index 0000000..4f6a675
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.json
@@ -0,0 +1,66 @@
+{
+ "allow_copy": 0, 
+ "allow_import": 0, 
+ "allow_rename": 0, 
+ "beta": 0, 
+ "creation": "2016-11-16 15:27:16.413449", 
+ "custom": 0, 
+ "docstatus": 0, 
+ "doctype": "DocType", 
+ "document_type": "", 
+ "editable_grid": 1, 
+ "engine": "InnoDB", 
+ "fields": [
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "customer_group", 
+   "fieldtype": "Link", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 1, 
+   "label": "Customer Group", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "Customer Group", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 1, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }
+ ], 
+ "hide_heading": 0, 
+ "hide_toolbar": 0, 
+ "idx": 0, 
+ "image_view": 0, 
+ "in_create": 0, 
+ "in_dialog": 0, 
+ "is_submittable": 0, 
+ "issingle": 0, 
+ "istable": 1, 
+ "max_attachments": 0, 
+ "modified": "2016-11-16 15:27:25.730507", 
+ "modified_by": "Administrator", 
+ "module": "Accounts", 
+ "name": "POS Customer Group", 
+ "name_case": "", 
+ "owner": "Administrator", 
+ "permissions": [], 
+ "quick_entry": 1, 
+ "read_only": 0, 
+ "read_only_onload": 0, 
+ "sort_field": "modified", 
+ "sort_order": "DESC", 
+ "track_seen": 0
+}
\ No newline at end of file
diff --git a/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.py b/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.py
new file mode 100644
index 0000000..85c1c9f
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_customer_group/pos_customer_group.py
@@ -0,0 +1,10 @@
+# -*- coding: utf-8 -*-
+# Copyright (c) 2015, Frappe Technologies Pvt. Ltd. and contributors
+# For license information, please see license.txt
+
+from __future__ import unicode_literals
+import frappe
+from frappe.model.document import Document
+
+class POSCustomerGroup(Document):
+	pass
diff --git a/erpnext/accounts/doctype/pos_item_group/__init__.py b/erpnext/accounts/doctype/pos_item_group/__init__.py
new file mode 100644
index 0000000..e69de29
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_item_group/__init__.py
diff --git a/erpnext/accounts/doctype/pos_item_group/pos_item_group.json b/erpnext/accounts/doctype/pos_item_group/pos_item_group.json
new file mode 100644
index 0000000..b278765
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_item_group/pos_item_group.json
@@ -0,0 +1,66 @@
+{
+ "allow_copy": 0, 
+ "allow_import": 0, 
+ "allow_rename": 0, 
+ "beta": 0, 
+ "creation": "2016-11-16 15:26:47.706713", 
+ "custom": 0, 
+ "docstatus": 0, 
+ "doctype": "DocType", 
+ "document_type": "", 
+ "editable_grid": 1, 
+ "engine": "InnoDB", 
+ "fields": [
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "item_group", 
+   "fieldtype": "Link", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 1, 
+   "label": "Item Group", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "Item Group", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 1, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }
+ ], 
+ "hide_heading": 0, 
+ "hide_toolbar": 0, 
+ "idx": 0, 
+ "image_view": 0, 
+ "in_create": 0, 
+ "in_dialog": 0, 
+ "is_submittable": 0, 
+ "issingle": 0, 
+ "istable": 1, 
+ "max_attachments": 0, 
+ "modified": "2016-11-16 15:27:32.263630", 
+ "modified_by": "Administrator", 
+ "module": "Accounts", 
+ "name": "POS Item Group", 
+ "name_case": "", 
+ "owner": "Administrator", 
+ "permissions": [], 
+ "quick_entry": 1, 
+ "read_only": 0, 
+ "read_only_onload": 0, 
+ "sort_field": "modified", 
+ "sort_order": "DESC", 
+ "track_seen": 0
+}
\ No newline at end of file
diff --git a/erpnext/accounts/doctype/pos_item_group/pos_item_group.py b/erpnext/accounts/doctype/pos_item_group/pos_item_group.py
new file mode 100644
index 0000000..ceaa57b
--- /dev/null
+++ b/erpnext/accounts/doctype/pos_item_group/pos_item_group.py
@@ -0,0 +1,10 @@
+# -*- coding: utf-8 -*-
+# Copyright (c) 2015, Frappe Technologies Pvt. Ltd. and contributors
+# For license information, please see license.txt
+
+from __future__ import unicode_literals
+import frappe
+from frappe.model.document import Document
+
+class POSItemGroup(Document):
+	pass
diff --git a/erpnext/accounts/doctype/pos_profile/pos_profile.js b/erpnext/accounts/doctype/pos_profile/pos_profile.js
index c1aa0c3..bbbab73 100755
--- a/erpnext/accounts/doctype/pos_profile/pos_profile.js
+++ b/erpnext/accounts/doctype/pos_profile/pos_profile.js
@@ -26,6 +26,30 @@
 	});
 });
 
+frappe.ui.form.on("POS Profile", {
+	setup: function(frm) {
+		frm.trigger("get_query_for_groups")
+	},
+
+	get_query_for_groups: function(frm) {
+		frm.fields_dict['item_groups'].grid.get_field('item_group').get_query = function(frm, cdt, cdn) {
+			return{
+				filters: {
+					'is_group': 0
+				}
+			}
+		}
+
+		frm.fields_dict['customer_groups'].grid.get_field('customer_group').get_query = function(frm, cdt, cdn) {
+			return{
+				filters: {
+					'is_group': 0
+				}
+			}
+		}
+	}
+})
+
 // Income Account
 // --------------------------------
 cur_frm.fields_dict['income_account'].get_query = function(doc,cdt,cdn) {
diff --git a/erpnext/accounts/doctype/pos_profile/pos_profile.json b/erpnext/accounts/doctype/pos_profile/pos_profile.json
index f450121..e6cfd74 100644
--- a/erpnext/accounts/doctype/pos_profile/pos_profile.json
+++ b/erpnext/accounts/doctype/pos_profile/pos_profile.json
@@ -380,6 +380,114 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
+   "fieldname": "section_break_14", 
+   "fieldtype": "Section Break", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "item_groups", 
+   "fieldtype": "Table", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Item Groups", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "POS Item Group", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "column_break_16", 
+   "fieldtype": "Column Break", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "customer_groups", 
+   "fieldtype": "Table", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Customer Groups", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "POS Customer Group", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "section_break_16", 
    "fieldtype": "Section Break", 
    "hidden": 0, 
@@ -548,34 +656,6 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
-   "fieldname": "customer_group", 
-   "fieldtype": "Link", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_list_view": 0, 
-   "label": "Customer Group", 
-   "length": 0, 
-   "no_copy": 0, 
-   "options": "Customer Group", 
-   "permlevel": 0, 
-   "precision": "", 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "remember_last_selected_value": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "unique": 0
-  }, 
-  {
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 0, 
-   "columns": 0, 
    "description": "", 
    "fieldname": "territory", 
    "fieldtype": "Link", 
@@ -951,8 +1031,8 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2016-11-03 15:53:33.820428", 
- "modified_by": "Administrator", 
+ "modified": "2016-11-17 00:20:51.377850", 
+ "modified_by": "rohit@erpnext.com", 
  "module": "Accounts", 
  "name": "POS Profile", 
  "owner": "Administrator", 
diff --git a/erpnext/accounts/doctype/pos_profile/pos_profile.py b/erpnext/accounts/doctype/pos_profile/pos_profile.py
index 5f4d5bc..ef497bf 100644
--- a/erpnext/accounts/doctype/pos_profile/pos_profile.py
+++ b/erpnext/accounts/doctype/pos_profile/pos_profile.py
@@ -13,6 +13,7 @@
 	def validate(self):
 		self.check_for_duplicate()
 		self.validate_all_link_fields()
+		self.validate_duplicate_groups()
 
 	def check_for_duplicate(self):
 		res = frappe.db.sql("""select name, user from `tabPOS Profile`
@@ -37,6 +38,16 @@
 						"company": self.company, "name": link_dn}):
 					frappe.throw(_("{0} does not belong to Company {1}").format(link_dn, self.company))
 
+	def validate_duplicate_groups(self):
+		item_groups = [d.item_group for d in self.item_groups]
+		customer_groups = [d.customer_group for d in self.customer_groups]
+
+		if len(item_groups) != len(set(item_groups)):
+			frappe.throw(_("Duplicate item group found in the item group table"), title = "Duplicate Item Group")
+
+		if len(customer_groups) != len(set(customer_groups)):
+			frappe.throw(_("Duplicate customer group found in the cutomer group table"), title = "Duplicate Customer Group")
+
 	def before_save(self):
 		set_account_for_mode_of_payment(self)
 
diff --git a/erpnext/accounts/doctype/sales_invoice/pos.py b/erpnext/accounts/doctype/sales_invoice/pos.py
index 1d1a122..ec30cb0 100644
--- a/erpnext/accounts/doctype/sales_invoice/pos.py
+++ b/erpnext/accounts/doctype/sales_invoice/pos.py
@@ -31,7 +31,7 @@
 		'doc': doc,
 		'default_customer': pos_profile.get('customer'),
 		'items': get_items(doc, pos_profile),
-		'customers': get_customers(pos_profile, doc, company_data.default_currency),
+		'customers': get_customers_list(pos_profile),
 		'pricing_rules': get_pricing_rules(doc),
 		'print_template': print_template,
 		'meta': {
@@ -106,7 +106,7 @@
 
 def get_items(doc, pos_profile):
 	item_list = []
-	for item in frappe.get_all("Item", fields=["*"], filters={'disabled': 0, 'has_variants': 0, 'is_sales_item': 1}):
+	for item in get_items_list(pos_profile):
 		item_doc = frappe.get_doc('Item', item.name)
 		if item_doc.taxes:
 			item.taxes = json.dumps(dict(([d.tax_type, d.tax_rate] for d in
@@ -129,6 +129,26 @@
 
 	return item_list
 
+def get_items_list(pos_profile):
+	cond = "1=1"
+	item_groups = []
+	if pos_profile.get('item_groups'):
+		cond = "item_group in (%s)"%(', '.join(['%s']*len(pos_profile.get('item_groups'))))
+		item_groups = [d.item_group for d in pos_profile.get('item_groups')]
+
+	return frappe.db.sql(""" select * from tabItem where disabled = 0 and has_variants = 0 
+		and is_sales_item = 1 and {cond}""".format(cond=cond), tuple(item_groups), as_dict=1) or []
+
+def get_customers_list(pos_profile):
+	cond = "1=1"
+	customer_groups = []
+	if pos_profile.get('customer_groups'):
+		cond = "customer_group in (%s)"%(', '.join(['%s']*len(pos_profile.get('customer_groups'))))
+		customer_groups = [d.customer_group for d in pos_profile.get('customer_groups')]
+
+	return frappe.db.sql(""" select * from tabCustomer where disabled = 0 
+		and {cond}""".format(cond=cond), tuple(customer_groups), as_dict=1) or {}
+
 def get_item_warehouse_for_company(company, warehouse):
 	if frappe.db.get_value('Warehouse', warehouse, 'company') != company:
 		warehouse = None
@@ -149,17 +169,6 @@
 
 	return serial_no_list
 
-def get_customers(pos_profile, doc, company_currency):
-	filters = {'disabled': 0}
-	customer_list = []
-	customers = frappe.get_all("Customer", fields=["*"], filters = filters)
-
-	for customer in customers:
-		customer_currency = get_party_account_currency('Customer', customer.name, doc.company) or doc.currency
-		if customer_currency == doc.currency or customer_currency == company_currency:
-			customer_list.append(customer)
-	return customer_list
-
 def get_pricing_rules(doc):
 	pricing_rules = ""
 	if doc.ignore_pricing_rule == 0:
diff --git a/erpnext/accounts/page/pos/pos.js b/erpnext/accounts/page/pos/pos.js
index 32e9b3a..cfc9582 100644
--- a/erpnext/accounts/page/pos/pos.js
+++ b/erpnext/accounts/page/pos/pos.js
@@ -387,7 +387,7 @@
 		var $wrap = me.wrapper.find(".item-list");
 		me.wrapper.find(".item-list").empty();
 
-		if (this.items) {
+		if (this.items.length > 0) {
 			$.each(this.items, function(index, obj) {
 				if(index < 30){
 					$(frappe.render_template("pos_item", {
@@ -400,6 +400,8 @@
 					})).tooltip().appendTo($wrap);
 				}
 			});
+		} else {
+			$("<h4>Searching record not found.</h4>").appendTo($wrap)
 		}
 
 		if(this.items.length == 1