diff --git a/app/code/Magento/Sales/Controller/Adminhtml/Order/Create.php b/app/code/Magento/Sales/Controller/Adminhtml/Order/Create.php
index ce485eed58e67..c5e9bf00a5cb4 100644
--- a/app/code/Magento/Sales/Controller/Adminhtml/Order/Create.php
+++ b/app/code/Magento/Sales/Controller/Adminhtml/Order/Create.php
@@ -14,14 +14,24 @@
  */
 class Create extends \Magento\Backend\App\Action
 {
+    /**
+     * @var \Magento\Framework\Escaper
+     */
+    protected $escaper;
+
     /**
      * @param Action\Context $context
      * @param \Magento\Catalog\Helper\Product $productHelper
+     * @param \Magento\Framework\Escaper $escaper
      */
-    public function __construct(Action\Context $context, \Magento\Catalog\Helper\Product $productHelper)
-    {
+    public function __construct(
+        Action\Context $context,
+        \Magento\Catalog\Helper\Product $productHelper,
+        \Magento\Framework\Escaper $escaper
+    ) {
         parent::__construct($context);
         $productHelper->setSkipSaleableCheck(true);
+        $this->escaper = $escaper;
     }
 
     /**
@@ -271,16 +281,33 @@ protected function _processActionData($action = null)
         if (isset($data) && isset($data['coupon']['code'])) {
             $couponCode = trim($data['coupon']['code']);
         }
+
         if (!empty($couponCode)) {
-            if ($this->_getQuote()->getCouponCode() !== $couponCode) {
+            $isApplyDiscount = false;
+            foreach ($this->_getQuote()->getAllItems() as $item) {
+                if (!$item->getNoDiscount()) {
+                    $isApplyDiscount = true;
+                    break;
+                }
+            }
+            if (!$isApplyDiscount) {
                 $this->messageManager->addError(
                     __(
-                        '"%1" coupon code is not valid.',
-                        $this->_objectManager->get('Magento\Framework\Escaper')->escapeHtml($couponCode)
+                        '"%1" coupon code was not applied. Do not apply discount is selected for item(s)',
+                        $this->escaper->escapeHtml($couponCode)
                     )
                 );
             } else {
-                $this->messageManager->addSuccess(__('The coupon code has been accepted.'));
+                if ($this->_getQuote()->getCouponCode() !== $couponCode) {
+                    $this->messageManager->addError(
+                        __(
+                            '"%1" coupon code is not valid.',
+                            $this->escaper->escapeHtml($couponCode)
+                        )
+                    );
+                } else {
+                    $this->messageManager->addSuccess(__('The coupon code has been accepted.'));
+                }
             }
         }
 
diff --git a/dev/tests/unit/testsuite/Magento/Sales/Controller/Adminhtml/Order/Create/ProcessDataTest.php b/dev/tests/unit/testsuite/Magento/Sales/Controller/Adminhtml/Order/Create/ProcessDataTest.php
new file mode 100644
index 0000000000000..da63836d01087
--- /dev/null
+++ b/dev/tests/unit/testsuite/Magento/Sales/Controller/Adminhtml/Order/Create/ProcessDataTest.php
@@ -0,0 +1,235 @@
+<?php
+/**
+ * Copyright © 2015 Magento. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+
+namespace Magento\Sales\Controller\Adminhtml\Order\Create;
+
+use Magento\TestFramework\Helper\ObjectManager as ObjectManagerHelper;
+
+/**
+ * Class ProcessDataTest
+ *
+ */
+class ProcessDataTest extends \PHPUnit_Framework_TestCase
+{
+    /**
+     * @var ProcessData
+     */
+    protected $processData;
+
+    /**
+     * @var \Magento\Framework\ObjectManagerInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $objectManager;
+
+    /**
+     * @var \Magento\Framework\App\RequestInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $request;
+
+    /**
+     * @var \Magento\Backend\Model\Session\Quote|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $session;
+
+    /**
+     * @var \Magento\Framework\Event\ManagerInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $eventManager;
+
+    /**
+     * @var \Magento\Framework\App\ActionFlag|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $actionFlag;
+
+    /**
+     * @var \Magento\Framework\Message\ManagerInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $messageManager;
+
+    /**
+     * @var \Magento\Framework\Escaper|\PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $escaper;
+
+    protected function setUp()
+    {
+        $objectManagerHelper = new ObjectManagerHelper($this);
+        $context = $this->getMock('Magento\Backend\App\Action\Context', [], [], '', false);
+
+        $this->request = $this->getMockForAbstractClass(
+            'Magento\Framework\App\RequestInterface',
+            [],
+            '',
+            false,
+            true,
+            true,
+            [
+                'getParam',
+                'getPost',
+                'get',
+                'has',
+                'setModuleName',
+                'setActionName',
+                'initForward',
+                'setDispatched',
+                'getModuleName',
+                'getActionName',
+                'getCookie'
+            ]
+        );
+        $response = $this->getMockForAbstractClass(
+            'Magento\Framework\App\ResponseInterface',
+            [],
+            '',
+            false,
+            true,
+            true,
+            []
+        );
+        $context->expects($this->any())->method('getResponse')->willReturn($response);
+        $context->expects($this->any())->method('getRequest')->willReturn($this->request);
+
+        $this->actionFlag = $this->getMock('Magento\Framework\App\ActionFlag', [], [], '', false);
+        $context->expects($this->any())->method('getActionFlag')->willReturn($this->actionFlag);
+
+        $this->messageManager = $this->getMock('Magento\Framework\Message\ManagerInterface', [], [], '', false);
+        $context->expects($this->any())->method('getMessageManager')->willReturn($this->messageManager);
+
+        $this->eventManager = $this->getMock('Magento\Framework\Event\ManagerInterface', [], [], '', false);
+        $context->expects($this->any())->method('getEventManager')->willReturn($this->eventManager);
+
+        $this->objectManager = $this->getMock('Magento\Framework\ObjectManagerInterface');
+        $context->expects($this->any())->method('getObjectManager')->willReturn($this->objectManager);
+
+        $this->session = $this->getMock(
+            'Magento\Backend\Model\Session\Quote',
+            ['setIsUrlNotice', 'getQuote'],
+            [],
+            '',
+            false
+        );
+        $context->expects($this->any())->method('getSession')->willReturn($this->session);
+        $this->escaper = $this->getMock('Magento\Framework\Escaper', ['escapeHtml'], [], '', false);
+
+        $this->processData = $objectManagerHelper->getObject(
+            'Magento\Sales\Controller\Adminhtml\Order\Create\ProcessData',
+            [
+                'context' => $context,
+                'escaper' => $this->escaper
+            ]
+        );
+    }
+
+    /**
+     * @param bool $noDiscount
+     * @param string $couponCode
+     * @param string $errorMessage
+     * @param string $actualCouponCode
+     * @dataProvider isApplyDiscountDataProvider
+     */
+    public function testExecute($noDiscount, $couponCode, $errorMessage, $actualCouponCode)
+    {
+        $quote = $this->getMock(
+            'Magento\Sales\Model\Quote',
+            ['getCouponCode', 'isVirtual', 'getAllItems'],
+            [],
+            '',
+            false
+        );
+        $create = $this->getMock('Magento\Sales\Model\AdminOrder\Create', [], [], '', false);
+
+        $paramReturnMap = [
+            ['customer_id', null, null],
+            ['store_id', null, null],
+            ['currency_id', null, null]
+        ];
+        $this->request->expects($this->atLeastOnce())->method('getParam')->willReturnMap($paramReturnMap);
+
+        $objectManagerParamMap = [
+            ['Magento\Sales\Model\AdminOrder\Create', $create],
+            ['Magento\Backend\Model\Session\Quote', $this->session]
+        ];
+        $this->objectManager->expects($this->atLeastOnce())->method('get')->willReturnMap($objectManagerParamMap);
+
+        $this->eventManager->expects($this->any())->method('dispatch');
+
+        $data = ['coupon' => ['code' => $couponCode]];
+        $postReturnMap = [
+            ['order', $data],
+            ['reset_shipping', false],
+            ['collect_shipping_rates', false],
+            ['sidebar', false],
+            ['add_product', false],
+            ['', false],
+            ['update_items', false],
+            ['remove_item', 1],
+            ['from', 2],
+            ['move_item', 1],
+            ['to', 2],
+            ['qty', 3],
+            ['payment', false],
+            [null, 'request'],
+            ['payment', false],
+            ['giftmessage', false],
+            ['add_products', false],
+            ['update_items', false],
+
+        ];
+        $this->request->expects($this->atLeastOnce())->method('getPost')->willReturnMap($postReturnMap);
+
+        $create->expects($this->once())->method('importPostData')->willReturnSelf();
+        $create->expects($this->once())->method('initRuleData')->willReturnSelf();
+        $create->expects($this->any())->method('getQuote')->willReturn($quote);
+
+        $address = $this->getMock('Magento\Sales\Model\Quote\Address', [], [], '', false);
+        $create->expects($this->once())->method('getBillingAddress')->willReturn($address);
+
+        $quote->expects($this->any())->method('isVirtual')->willReturn(true);
+
+        $this->request->expects($this->once())->method('has')->with('item')->willReturn(false);
+
+        $create->expects($this->once())->method('saveQuote')->willReturnSelf();
+
+        $this->session->expects($this->any())->method('getQuote')->willReturn($quote);
+        $item = $this->getMockForAbstractClass(
+            'Magento\Eav\Model\Entity\Collection\AbstractCollection',
+            [],
+            '',
+            false,
+            true,
+            true,
+            ['getNoDiscount']
+        );
+        $quote->expects($this->any())->method('getAllItems')->willReturn([$item]);
+        $item->expects($this->any())->method('getNoDiscount')->willReturn($noDiscount);
+        if (!$noDiscount) {
+            $quote->expects($this->once())->method('getCouponCode')->willReturn($actualCouponCode);
+        }
+
+        $errorMessageManager = __(
+            $errorMessage,
+            $couponCode
+        );
+        $this->escaper->expects($this->once())->method('escapeHtml')->with($couponCode)->willReturn($couponCode);
+
+        $this->messageManager->expects($this->once())->method('addError')->with($errorMessageManager)->willReturnSelf();
+
+        $this->actionFlag->expects($this->once())->method('get')->willReturn(false);
+        $this->session->expects($this->once())->method('setIsUrlNotice')->with(false)->willReturn(false);
+        $this->request->expects($this->once())->method('initForward')->willReturnSelf();
+        $this->request->expects($this->once())->method('setActionName')->willReturnSelf();
+        $this->request->expects($this->once())->method('setDispatched')->willReturnSelf();
+        $this->assertNull($this->processData->execute());
+    }
+
+    public function isApplyDiscountDataProvider()
+    {
+        return [
+            [true, '123', '"%1" coupon code was not applied. Do not apply discount is selected for item(s)', null],
+            [false, '123', '"%1" coupon code is not valid.', '132'],
+        ];
+    }
+}