diff --git a/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun_encap.c b/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun_encap.c
index f0c3464f037f..0c88cf47af01 100644
--- a/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun_encap.c
+++ b/drivers/net/ethernet/mellanox/mlx5/core/en/tc_tun_encap.c
@@ -1030,9 +1030,6 @@ int mlx5e_tc_tun_encap_dests_set(struct mlx5e_priv *priv,
 	int out_index;
 	int err = 0;
 
-	if (!mlx5e_is_eswitch_flow(flow))
-		return 0;
-
 	parse_attr = attr->parse_attr;
 	esw_attr = attr->esw_attr;
 	*vf_tun = false;
diff --git a/drivers/net/ethernet/mellanox/mlx5/core/en_tc.c b/drivers/net/ethernet/mellanox/mlx5/core/en_tc.c
index 8d0a3f69693e..92377632f9e0 100644
--- a/drivers/net/ethernet/mellanox/mlx5/core/en_tc.c
+++ b/drivers/net/ethernet/mellanox/mlx5/core/en_tc.c
@@ -1725,6 +1725,19 @@ verify_attr_actions(u32 actions, struct netlink_ext_ack *extack)
 	return 0;
 }
 
+static bool
+has_encap_dests(struct mlx5_flow_attr *attr)
+{
+	struct mlx5_esw_flow_attr *esw_attr = attr->esw_attr;
+	int out_index;
+
+	for (out_index = 0; out_index < MLX5_MAX_FLOW_FWD_VPORTS; out_index++)
+		if (esw_attr->dests[out_index].flags & MLX5_ESW_DEST_ENCAP)
+			return true;
+
+	return false;
+}
+
 static int
 post_process_attr(struct mlx5e_tc_flow *flow,
 		  struct mlx5_flow_attr *attr,
@@ -1737,9 +1750,11 @@ post_process_attr(struct mlx5e_tc_flow *flow,
 	if (err)
 		goto err_out;
 
-	err = mlx5e_tc_tun_encap_dests_set(flow->priv, flow, attr, extack, &vf_tun);
-	if (err)
-		goto err_out;
+	if (mlx5e_is_eswitch_flow(flow) && has_encap_dests(attr)) {
+		err = mlx5e_tc_tun_encap_dests_set(flow->priv, flow, attr, extack, &vf_tun);
+		if (err)
+			goto err_out;
+	}
 
 	if (attr->action & MLX5_FLOW_CONTEXT_ACTION_MOD_HDR) {
 		err = mlx5e_tc_attach_mod_hdr(flow->priv, flow, attr);