diff --git a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/ServerApplicationManagementService.java b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/ServerApplicationManagementService.java
index 52c3698f9d..d1110df432 100644
--- a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/ServerApplicationManagementService.java
+++ b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/ServerApplicationManagementService.java
@@ -57,7 +57,6 @@
 import org.wso2.carbon.identity.api.server.application.management.v1.ResidentApplication;
 import org.wso2.carbon.identity.api.server.application.management.v1.SAML2Configuration;
 import org.wso2.carbon.identity.api.server.application.management.v1.SAML2ServiceProvider;
-import org.wso2.carbon.identity.api.server.application.management.v1.TagsPatchRequest;
 import org.wso2.carbon.identity.api.server.application.management.v1.WSTrustConfiguration;
 import org.wso2.carbon.identity.api.server.application.management.v1.core.functions.Utils;
 import org.wso2.carbon.identity.api.server.application.management.v1.core.functions.application.ApiModelToServiceProvider;
@@ -84,8 +83,6 @@
 import org.wso2.carbon.identity.application.common.IdentityApplicationManagementException;
 import org.wso2.carbon.identity.application.common.model.ApplicationBasicInfo;
 import org.wso2.carbon.identity.application.common.model.ApplicationTagsItem;
-import org.wso2.carbon.identity.application.common.model.ApplicationTagsPatch;
-import org.wso2.carbon.identity.application.common.model.ApplicationTagsPatch.ApplicationTagsPatchBuilder.OperationEnum;
 import org.wso2.carbon.identity.application.common.model.AuthenticationStep;
 import org.wso2.carbon.identity.application.common.model.FederatedAuthenticatorConfig;
 import org.wso2.carbon.identity.application.common.model.IdentityProvider;
@@ -93,8 +90,6 @@
 import org.wso2.carbon.identity.application.common.model.InboundAuthenticationConfig;
 import org.wso2.carbon.identity.application.common.model.InboundAuthenticationRequestConfig;
 import org.wso2.carbon.identity.application.common.model.InboundConfigurationProtocol;
-import org.wso2.carbon.identity.application.common.model.ListValue;
-import org.wso2.carbon.identity.application.common.model.ListValue.ListValueBuilder;
 import org.wso2.carbon.identity.application.common.model.LocalAuthenticatorConfig;
 import org.wso2.carbon.identity.application.common.model.ServiceProvider;
 import org.wso2.carbon.identity.application.common.model.SpFileContent;
@@ -862,8 +857,6 @@ public String createApplication(ApplicationModel applicationModel, String templa
     public void patchApplication(String applicationId, ApplicationPatchModel applicationPatchModel) {
 
         ServiceProvider appToUpdate = cloneApplication(applicationId);
-        //Setting an empty array to avoid updating same tags again.
-        appToUpdate.setTags(new ArrayList<>());
         if (applicationPatchModel != null) {
             new UpdateServiceProvider().apply(appToUpdate, applicationPatchModel);
         }
@@ -873,44 +866,12 @@ public void patchApplication(String applicationId, ApplicationPatchModel applica
             String username = ContextLoader.getUsernameFromContext();
             getApplicationManagementService()
                     .updateApplicationByResourceId(applicationId, appToUpdate, tenantDomain, username);
-            if (applicationPatchModel.getTags() != null) {
-                getApplicationManagementService().updateApplicationTags(appToUpdate.getApplicationID(),
-                        getApplicationTagsPatchModel(applicationPatchModel.getTags()), tenantDomain);
-            }
         } catch (IdentityApplicationManagementException e) {
             String msg = "Error patching application with id: " + applicationId;
             throw handleIdentityApplicationManagementException(e, msg);
         }
     }
 
-    private List<ApplicationTagsPatch> getApplicationTagsPatchModel(List<TagsPatchRequest> tagsPatchModel) {
-
-        List<ApplicationTagsPatch> applicationTagsPatch = new ArrayList<>();
-
-        for (TagsPatchRequest tagsPatch: tagsPatchModel) {
-            OperationEnum operation;
-            switch (tagsPatch.getOperation().toString()) {
-                case "ADD":
-                    operation = OperationEnum.ADD;
-                    break;
-                case "REMOVE":
-                    operation = OperationEnum.REMOVE;
-                    break;
-                default:
-                    operation = null;
-            }
-
-            List<ListValue> patchTags = tagsPatch.getTags().stream()
-                    .map(tag -> new ListValueBuilder().value(tag.getValue()).build())
-                    .collect(Collectors.toList());
-
-            applicationTagsPatch.add(new ApplicationTagsPatch.ApplicationTagsPatchBuilder()
-                    .operation(operation)
-                    .tags(patchTags).build());
-        }
-        return applicationTagsPatch;
-    }
-
     public void deleteApplication(String applicationId) {
 
         String username = ContextLoader.getUsernameFromContext();
diff --git a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/ApiModelToServiceProvider.java b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/ApiModelToServiceProvider.java
index ad1939542c..c4bbf8b7d4 100644
--- a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/ApiModelToServiceProvider.java
+++ b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/ApiModelToServiceProvider.java
@@ -28,9 +28,9 @@
 import org.wso2.carbon.identity.application.common.model.ApplicationTagsItem.ApplicationTagsItemBuilder;
 import org.wso2.carbon.identity.application.common.model.ServiceProvider;
 
-import java.util.ArrayList;
 import java.util.List;
 import java.util.function.Function;
+import java.util.stream.Collectors;
 
 import static org.wso2.carbon.identity.api.server.application.management.v1.core.functions.Utils.setIfNotNull;
 
@@ -104,10 +104,9 @@ private void addAdvancedConfigurationToApplication(ServiceProvider application,
     private void addApplicationTagsToApplication(ServiceProvider application, List<ListValue> tags) {
 
         if (tags != null) {
-            List<ApplicationTagsItem> tagsList = new ArrayList<>();
-            for (ListValue tag: tags) {
-                tagsList.add(new ApplicationTagsItemBuilder().id(tag.getValue()).build());
-            }
+            List<ApplicationTagsItem> tagsList = tags.stream()
+                    .map(tag -> new ApplicationTagsItemBuilder().id(tag.getValue()).build())
+                    .collect(Collectors.toList());
             setIfNotNull(tagsList, application::setTags);
         }
     }
diff --git a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/UpdateServiceProvider.java b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/UpdateServiceProvider.java
index d88f056b5f..778e380d55 100644
--- a/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/UpdateServiceProvider.java
+++ b/components/org.wso2.carbon.identity.api.server.application.management/org.wso2.carbon.identity.api.server.application.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/management/v1/core/functions/application/UpdateServiceProvider.java
@@ -15,15 +15,23 @@
  */
 package org.wso2.carbon.identity.api.server.application.management.v1.core.functions.application;
 
+import org.springframework.util.CollectionUtils;
 import org.wso2.carbon.identity.api.server.application.management.v1.AdvancedApplicationConfiguration;
 import org.wso2.carbon.identity.api.server.application.management.v1.ApplicationPatchModel;
 import org.wso2.carbon.identity.api.server.application.management.v1.AuthenticationSequence;
 import org.wso2.carbon.identity.api.server.application.management.v1.ClaimConfiguration;
+import org.wso2.carbon.identity.api.server.application.management.v1.ListValue;
 import org.wso2.carbon.identity.api.server.application.management.v1.ProvisioningConfiguration;
+import org.wso2.carbon.identity.api.server.application.management.v1.TagsPatchRequest;
 import org.wso2.carbon.identity.api.server.application.management.v1.core.functions.UpdateFunction;
 import org.wso2.carbon.identity.api.server.application.management.v1.core.functions.application.provisioning.UpdateProvisioningConfiguration;
+import org.wso2.carbon.identity.application.common.model.ApplicationTagsItem;
+import org.wso2.carbon.identity.application.common.model.ApplicationTagsItem.ApplicationTagsItemBuilder;
 import org.wso2.carbon.identity.application.common.model.ServiceProvider;
 
+import java.util.List;
+import java.util.stream.Collectors;
+
 import static org.wso2.carbon.identity.api.server.application.management.v1.core.functions.Utils.setIfNotNull;
 
 /**
@@ -44,6 +52,7 @@ public void apply(ServiceProvider serviceProvider, ApplicationPatchModel applica
         patchAuthenticationSequence(applicationPatchModel.getAuthenticationSequence(), serviceProvider);
         patchAdvancedConfiguration(serviceProvider, applicationPatchModel.getAdvancedConfigurations());
         patchProvisioningConfiguration(applicationPatchModel.getProvisioningConfigurations(), serviceProvider);
+        patchApplicationTags(applicationPatchModel.getTags(), serviceProvider);
     }
 
     private void patchClaimConfiguration(ServiceProvider serviceProvider, ClaimConfiguration claimConfiguration) {
@@ -76,4 +85,28 @@ private void patchProvisioningConfiguration(ProvisioningConfiguration provisioni
             new UpdateProvisioningConfiguration().apply(serviceProvider, provisioningConfigurations);
         }
     }
+
+    private void patchApplicationTags(List<TagsPatchRequest> tags, ServiceProvider serviceProvider) {
+
+        if (!CollectionUtils.isEmpty(tags)) {
+            List<String> tagIdList = serviceProvider.getTags().stream().map(ApplicationTagsItem::getId)
+                    .collect(Collectors.toList());
+            for (TagsPatchRequest patchReq: tags) {
+
+                if (patchReq.getOperation().toString().equals("ADD")) {
+                    List<String> addingTagIdList = patchReq.getTags().stream().map(ListValue::getValue)
+                            .collect(Collectors.toList());
+                    tagIdList.addAll(addingTagIdList);
+                    continue;
+                }
+                if (patchReq.getOperation().toString().equals("REMOVE")) {
+                    List<String> removingTagIdList = patchReq.getTags().stream().map(ListValue::getValue)
+                            .collect(Collectors.toList());
+                    tagIdList.removeAll(removingTagIdList);
+                }
+            }
+            serviceProvider.setTags(tagIdList.stream().map(id -> new ApplicationTagsItemBuilder().id(id).build())
+                    .collect(Collectors.toList()));
+        }
+    }
 }
diff --git a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.common/pom.xml b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.common/pom.xml
index 9d71780848..fbcb8bb3f4 100644
--- a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.common/pom.xml
+++ b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.common/pom.xml
@@ -24,12 +24,12 @@
     <parent>
         <groupId>org.wso2.carbon.identity.server.api</groupId>
         <artifactId>org.wso2.carbon.identity.api.server.application.tag.management</artifactId>
-        <version>1.2.81-SNAPSHOT</version>
+        <version>1.2.85-SNAPSHOT</version>
         <relativePath>../pom.xml</relativePath>
     </parent>
 
     <artifactId>org.wso2.carbon.identity.api.server.application.tag.management.common</artifactId>
-    <version>1.2.81-SNAPSHOT</version>
+    <version>1.2.85-SNAPSHOT</version>
     <packaging>jar</packaging>
 
     <build>
diff --git a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/pom.xml b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/pom.xml
index aaf1a1af20..5478a8a59f 100644
--- a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/pom.xml
+++ b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/pom.xml
@@ -24,7 +24,7 @@
     <parent>
         <groupId>org.wso2.carbon.identity.server.api</groupId>
         <artifactId>org.wso2.carbon.identity.api.server.application.tag.management</artifactId>
-        <version>1.2.81-SNAPSHOT</version>
+        <version>1.2.85-SNAPSHOT</version>
         <relativePath>../pom.xml</relativePath>
     </parent>
 
diff --git a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/core/ServerApplicationTagManagementService.java b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/core/ServerApplicationTagManagementService.java
index e6a32aedae..6c52b6b300 100644
--- a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/core/ServerApplicationTagManagementService.java
+++ b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/core/ServerApplicationTagManagementService.java
@@ -160,7 +160,8 @@ public ApplicationTagsListResponse getAllApplicationTags(Integer offset, Integer
     public ApplicationTagResponse getApplicationTagById(String tagId) {
 
         try {
-            ApplicationTagsItem applicationTag = ApplicationTagManagementServiceHolder.getApplicationTagManager()
+            org.wso2.carbon.identity.application.common.model.ApplicationTagsListItem applicationTag =
+                    ApplicationTagManagementServiceHolder.getApplicationTagManager()
                     .getApplicationTagById(tagId, CarbonContext.getThreadLocalCarbonContext().getTenantDomain());
             if (applicationTag == null) {
                 throw ApplicationTagMgtEndpointUtil.handleException(Response.Status.NOT_FOUND,
@@ -215,18 +216,19 @@ private ApplicationTag createApplicationTag(ApplicationTagModel applicationTag)
     }
 
     /**
-     * Build ApplicationTagsListItem from the ApplicationTagsItem.
+     * Build ApplicationTagResponse from the ApplicationTagsListItem.
      *
      * @param applicationTag Application Tag Item.
      * @return ApplicationTagsListItem.
      */
-    private ApplicationTagResponse buildApplicationTagResponse(ApplicationTagsItem applicationTag) {
+    private ApplicationTagResponse buildApplicationTagResponse(
+            org.wso2.carbon.identity.application.common.model.ApplicationTagsListItem applicationTag) {
 
        return new ApplicationTagResponse()
                     .id(applicationTag.getId())
                     .name(applicationTag.getName())
                     .colour(applicationTag.getColour())
-                    .associatedAppsCount(0);
+                    .associatedAppsCount(applicationTag.getAssociatedAppsCount());
     }
 
     /**
diff --git a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/impl/ApplicationsTagsApiServiceImpl.java b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/impl/ApplicationsTagsApiServiceImpl.java
index dbda428d4b..6c654fb1f1 100644
--- a/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/impl/ApplicationsTagsApiServiceImpl.java
+++ b/components/org.wso2.carbon.identity.api.server.application.tag.management/org.wso2.carbon.identity.api.server.application.tag.management.v1/src/main/java/org/wso2/carbon/identity/api/server/application/tag/management/v1/impl/ApplicationsTagsApiServiceImpl.java
@@ -57,7 +57,7 @@ public Response deleteApplicationTag(String tagId) {
     }
 
     @Override
-    public Response getAllApplicationTags(Integer offset, Integer limit, String filter) {
+    public Response getAllApplicationTags(Integer limit, Integer offset, String filter) {
 
         return Response.ok().entity(serverApplicationTagManagementService.getAllApplicationTags(offset, limit,
                 filter)).build();
diff --git a/components/org.wso2.carbon.identity.api.server.application.tag.management/pom.xml b/components/org.wso2.carbon.identity.api.server.application.tag.management/pom.xml
index 55c4224da7..a28cd13ca9 100644
--- a/components/org.wso2.carbon.identity.api.server.application.tag.management/pom.xml
+++ b/components/org.wso2.carbon.identity.api.server.application.tag.management/pom.xml
@@ -23,12 +23,12 @@
     <parent>
         <artifactId>identity-api-server</artifactId>
         <groupId>org.wso2.carbon.identity.server.api</groupId>
-        <version>1.2.81-SNAPSHOT</version>
+        <version>1.2.85-SNAPSHOT</version>
         <relativePath>../../pom.xml</relativePath>
     </parent>
     <modelVersion>4.0.0</modelVersion>
     <artifactId>org.wso2.carbon.identity.api.server.application.tag.management</artifactId>
-    <version>1.2.81-SNAPSHOT</version>
+    <version>1.2.85-SNAPSHOT</version>
     <packaging>pom</packaging>
 
     <modules>
diff --git a/pom.xml b/pom.xml
index a66b3a1bf1..2d8a40db27 100644
--- a/pom.xml
+++ b/pom.xml
@@ -408,7 +408,13 @@
             </dependency>
             <dependency>
                 <groupId>org.wso2.carbon.identity.server.api</groupId>
-
+                <artifactId>org.wso2.carbon.identity.api.server.api.resource.common</artifactId>
+                <version>${project.version}</version>
+                <scope>provided</scope>
+            </dependency>
+            <dependency>
+                <groupId>org.wso2.carbon.identity.server.api</groupId>
+                <artifactId>org.wso2.carbon.identity.api.server.application.tag.management.common</artifactId>
                 <version>${project.version}</version>
                 <scope>provided</scope>
             </dependency>