diff --git a/dp/wifi3.0/dp_rx.c b/dp/wifi3.0/dp_rx.c
index cea2951c42..5c35482b31 100644
--- a/dp/wifi3.0/dp_rx.c
+++ b/dp/wifi3.0/dp_rx.c
@@ -1134,27 +1134,64 @@ void dp_rx_fill_gro_info(struct dp_soc *soc, uint8_t *rx_tlv,
  * @soc: DP soc handle
  * @nbuf: pointer to msdu.
  * @mpdu_len: mpdu length
+ * @l3_pad_len: L3 padding length by HW
  *
  * Return: returns true if nbuf is last msdu of mpdu else retuns false.
  */
 static inline bool dp_rx_adjust_nbuf_len(struct dp_soc *soc,
-					 qdf_nbuf_t nbuf, uint16_t *mpdu_len)
+					 qdf_nbuf_t nbuf,
+					 uint16_t *mpdu_len,
+					 uint32_t l3_pad_len)
 {
 	bool last_nbuf;
+	uint32_t pkt_hdr_size;
 
-	if (*mpdu_len > (RX_DATA_BUFFER_SIZE - soc->rx_pkt_tlv_size)) {
+	pkt_hdr_size = soc->rx_pkt_tlv_size + l3_pad_len;
+
+	if ((*mpdu_len + pkt_hdr_size) > RX_DATA_BUFFER_SIZE) {
 		qdf_nbuf_set_pktlen(nbuf, RX_DATA_BUFFER_SIZE);
 		last_nbuf = false;
+		*mpdu_len -= (RX_DATA_BUFFER_SIZE - pkt_hdr_size);
 	} else {
-		qdf_nbuf_set_pktlen(nbuf, (*mpdu_len + soc->rx_pkt_tlv_size));
+		qdf_nbuf_set_pktlen(nbuf, (*mpdu_len + pkt_hdr_size));
 		last_nbuf = true;
+		*mpdu_len = 0;
 	}
 
-	*mpdu_len -= (RX_DATA_BUFFER_SIZE - soc->rx_pkt_tlv_size);
-
 	return last_nbuf;
 }
 
+/**
+ * dp_get_l3_hdr_pad_len() - get L3 header padding length.
+ *
+ * @soc: DP soc handle
+ * @nbuf: pointer to msdu.
+ *
+ * Return: returns padding length in bytes.
+ */
+static inline uint32_t dp_get_l3_hdr_pad_len(struct dp_soc *soc,
+					     qdf_nbuf_t nbuf)
+{
+	uint32_t l3_hdr_pad = 0;
+	uint8_t *rx_tlv_hdr;
+	struct hal_rx_msdu_metadata msdu_metadata;
+
+	while (nbuf) {
+		if (!qdf_nbuf_is_rx_chfrag_cont(nbuf)) {
+			/* scattered msdu end with continuation is 0 */
+			rx_tlv_hdr = qdf_nbuf_data(nbuf);
+			hal_rx_msdu_metadata_get(soc->hal_soc,
+						 rx_tlv_hdr,
+						 &msdu_metadata);
+			l3_hdr_pad = msdu_metadata.l3_hdr_pad;
+			break;
+		}
+		nbuf = nbuf->next;
+	}
+
+	return l3_hdr_pad;
+}
+
 /**
  * dp_rx_sg_create() - create a frag_list for MSDUs which are spread across
  *		     multiple nbufs.
@@ -1172,6 +1209,7 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 	uint16_t frag_list_len = 0;
 	uint16_t mpdu_len;
 	bool last_nbuf;
+	uint32_t l3_hdr_pad_offset = 0;
 
 	/*
 	 * Use msdu len got from REO entry descriptor instead since
@@ -1179,6 +1217,7 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 	 * from REO descriptor is right for non-raw RX scatter msdu.
 	 */
 	mpdu_len = QDF_NBUF_CB_RX_PKT_LEN(nbuf);
+
 	/*
 	 * this is a case where the complete msdu fits in one single nbuf.
 	 * in this case HW sets both start and end bit and we only need to
@@ -1191,6 +1230,7 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 		return nbuf;
 	}
 
+	l3_hdr_pad_offset = dp_get_l3_hdr_pad_len(soc, nbuf);
 	/*
 	 * This is a case where we have multiple msdus (A-MSDU) spread across
 	 * multiple nbufs. here we create a fraglist out of these nbufs.
@@ -1210,17 +1250,23 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 	 * nbufs will form the frag_list of the parent nbuf.
 	 */
 	qdf_nbuf_set_rx_chfrag_start(parent, 1);
-	last_nbuf = dp_rx_adjust_nbuf_len(soc, parent, &mpdu_len);
+	/*
+	 * L3 header padding is only needed for the 1st buffer
+	 * in a scattered msdu
+	 */
+	last_nbuf = dp_rx_adjust_nbuf_len(soc, parent, &mpdu_len,
+					  l3_hdr_pad_offset);
 
 	/*
-	 * HW issue:  MSDU cont bit is set but reported MPDU length can fit
+	 * MSDU cont bit is set but reported MPDU length can fit
 	 * in to single buffer
 	 *
 	 * Increment error stats and avoid SG list creation
 	 */
 	if (last_nbuf) {
 		DP_STATS_INC(soc, rx.err.msdu_continuation_err, 1);
-		qdf_nbuf_pull_head(parent, soc->rx_pkt_tlv_size);
+		qdf_nbuf_pull_head(parent,
+				   soc->rx_pkt_tlv_size + l3_hdr_pad_offset);
 		return parent;
 	}
 
@@ -1230,8 +1276,9 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 	 * till we hit the last_nbuf of the list.
 	 */
 	do {
-		last_nbuf = dp_rx_adjust_nbuf_len(soc, nbuf, &mpdu_len);
-		qdf_nbuf_pull_head(nbuf, soc->rx_pkt_tlv_size);
+		last_nbuf = dp_rx_adjust_nbuf_len(soc, nbuf, &mpdu_len, 0);
+		qdf_nbuf_pull_head(nbuf,
+				   soc->rx_pkt_tlv_size);
 		frag_list_len += qdf_nbuf_len(nbuf);
 
 		if (last_nbuf) {
@@ -1247,7 +1294,8 @@ qdf_nbuf_t dp_rx_sg_create(struct dp_soc *soc, qdf_nbuf_t nbuf)
 	qdf_nbuf_append_ext_list(parent, frag_list, frag_list_len);
 	parent->next = next;
 
-	qdf_nbuf_pull_head(parent, soc->rx_pkt_tlv_size);
+	qdf_nbuf_pull_head(parent,
+			   soc->rx_pkt_tlv_size + l3_hdr_pad_offset);
 	return parent;
 }