diff --git a/CHANGELOG.md b/CHANGELOG.md
index 437e91e3e..2285c951c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -6,6 +6,9 @@ ENHANCEMENTS:
 * `d/tfe_workspace`: Add an `auto_destroy_at` attribute for reading a scheduled auto-destroy, by @notchairmk [1354](https://github.com/hashicorp/terraform-provider-tfe/pull/1354)
 * `r/tfe_registry_module`: Add `initial_version` support for Branch Based Modules by @aaabdelgany [#1363](https://github.com/hashicorp/terraform-provider-tfe/pull/1363)
 
+BUG FIXES:
+* `r/tfe_registry_module`: Prevents constant diff after a successful apply when `tags` and `tests_enabled` is not set by @Uk1288 [#1357](https://github.com/hashicorp/terraform-provider-tfe/pull/1357)
+
 ## v0.55.0
 
 FEATURES:
diff --git a/internal/provider/resource_tfe_registry_module.go b/internal/provider/resource_tfe_registry_module.go
index f9b7c1db2..7a1f3805f 100644
--- a/internal/provider/resource_tfe_registry_module.go
+++ b/internal/provider/resource_tfe_registry_module.go
@@ -32,6 +32,9 @@ func resourceTFERegistryModule() *schema.Resource {
 			StateContext: resourceTFERegistryModuleImporter,
 		},
 
+		CustomizeDiff: func(c context.Context, d *schema.ResourceDiff, meta interface{}) error {
+			return validateVcsRepo(d)
+		},
 		Schema: map[string]*schema.Schema{
 			"organization": {
 				Type:     schema.TypeString,
@@ -95,6 +98,7 @@ func resourceTFERegistryModule() *schema.Resource {
 						"tags": {
 							Type:     schema.TypeBool,
 							Optional: true,
+							Computed: true,
 						},
 					},
 				},
@@ -125,6 +129,7 @@ func resourceTFERegistryModule() *schema.Resource {
 			"test_config": {
 				Type:     schema.TypeList,
 				Optional: true,
+				Computed: true,
 				Elem: &schema.Resource{
 					Schema: map[string]*schema.Schema{
 						"tests_enabled": {
@@ -173,8 +178,8 @@ func resourceTFERegistryModuleCreateWithVCS(v interface{}, meta interface{}, d *
 	branch, branchOk := vcsRepo["branch"].(string)
 	initialVersion, initialVersionOk := d.GetOk("initial_version")
 
-	if tagsOk && tags && branchOk && branch != "" {
-		return nil, fmt.Errorf("tags must be set to false when a branch is provided")
+	if tagsOk {
+		options.VCSRepo.Tags = tfe.Bool(tags)
 	}
 
 	if branchOk && branch != "" {
@@ -312,10 +317,6 @@ func resourceTFERegistryModuleUpdate(d *schema.ResourceData, meta interface{}) e
 		tags, tagsOk := vcsRepo["tags"].(bool)
 		branch, branchOk := vcsRepo["branch"].(string)
 
-		if tagsOk && tags && branchOk && branch != "" {
-			return fmt.Errorf("tags must be set to false when a branch is provided")
-		}
-
 		if tagsOk {
 			options.VCSRepo.Tags = tfe.Bool(tags)
 		}
@@ -348,7 +349,7 @@ func resourceTFERegistryModuleUpdate(d *schema.ResourceData, meta interface{}) e
 	})
 
 	if err != nil {
-		return fmt.Errorf("Error while waiting for module %s/%s to be updated: %w", registryModule.Organization.Name, registryModule.Name, err)
+		return fmt.Errorf("Error while waiting for module %s/%s to be updated: %w", rmID.Organization, rmID.Name, err)
 	}
 
 	d.SetId(registryModule.ID)
@@ -413,10 +414,10 @@ func resourceTFERegistryModuleRead(d *schema.ResourceData, meta interface{}) err
 		}
 
 		testConfig = append(testConfig, testConfigValues)
-
-		d.Set("test_config", testConfig)
 	}
 
+	d.Set("test_config", testConfig)
+
 	return nil
 }
 
@@ -481,3 +482,30 @@ func resourceTFERegistryModuleImporter(ctx context.Context, d *schema.ResourceDa
 		d.Id(),
 	)
 }
+
+func validateVcsRepo(d *schema.ResourceDiff) error {
+	vcsRepo, ok := d.GetRawConfig().AsValueMap()["vcs_repo"]
+	if !ok || vcsRepo.LengthInt() == 0 {
+		return nil
+	}
+
+	branchValue := vcsRepo.AsValueSlice()[0].GetAttr("branch")
+	tagsValue := vcsRepo.AsValueSlice()[0].GetAttr("tags")
+
+	if !tagsValue.IsNull() && tagsValue.False() && branchValue.IsNull() {
+		return fmt.Errorf("branch must be provided when tags is set to false")
+	}
+
+	if !tagsValue.IsNull() && !branchValue.IsNull() {
+		tags := tagsValue.True()
+		branch := branchValue.AsString()
+		// tags must be set to true or branch provided but not both
+		if tags && branch != "" {
+			return fmt.Errorf("tags must be set to false when a branch is provided")
+		} else if !tags && branch == "" {
+			return fmt.Errorf("tags must be set to true when no branch is provided")
+		}
+	}
+
+	return nil
+}
diff --git a/internal/provider/resource_tfe_registry_module_test.go b/internal/provider/resource_tfe_registry_module_test.go
index b5aa7babe..c11e6f462 100644
--- a/internal/provider/resource_tfe_registry_module_test.go
+++ b/internal/provider/resource_tfe_registry_module_test.go
@@ -17,7 +17,7 @@ import (
 	"github.com/hashicorp/terraform-plugin-sdk/v2/terraform"
 )
 
-func TestAccTFERegistryModule_vcs(t *testing.T) {
+func TestAccTFERegistryModule_vcsBasic(t *testing.T) {
 	registryModule := &tfe.RegistryModule{}
 	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
 	orgName := fmt.Sprintf("tst-terraform-%d", rInt)
@@ -38,7 +38,7 @@ func TestAccTFERegistryModule_vcs(t *testing.T) {
 		CheckDestroy: testAccCheckTFERegistryModuleDestroy,
 		Steps: []resource.TestStep{
 			{
-				Config: testAccTFERegistryModule_vcs(rInt),
+				Config: testAccTFERegistryModule_vcsBasic(rInt),
 				Check: resource.ComposeTestCheckFunc(
 					testAccCheckTFERegistryModuleExists(
 						"tfe_registry_module.foobar",
@@ -300,6 +300,54 @@ func TestAccTFERegistryModule_publicRegistryModule(t *testing.T) {
 	})
 }
 
+func TestAccTFERegistryModule_branchOnly(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config: testAccTFERegistryModule_branchOnly(rInt),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "publishing_mechanism", "branch"),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "test_config.0.tests_enabled", strconv.FormatBool(false)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.tags", strconv.FormatBool(false)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.branch", "main"),
+				),
+			},
+		},
+	})
+}
+
+func TestAccTFERegistryModule_vcsRepoWithTags(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config: testAccTFERegistryModule_vcsRepoWithFalseTags(rInt),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "publishing_mechanism", "branch"),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "test_config.0.tests_enabled", strconv.FormatBool(false)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.tags", strconv.FormatBool(false)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.branch", "main"),
+				),
+			},
+		},
+	})
+}
+
 func TestAccTFERegistryModule_noCodeModule(t *testing.T) {
 	skipIfEnterprise(t)
 
@@ -366,7 +414,7 @@ func TestAccTFERegistryModuleImport_vcsPrivateRMDeprecatedFormat(t *testing.T) {
 		CheckDestroy: testAccCheckTFERegistryModuleDestroy,
 		Steps: []resource.TestStep{
 			{
-				Config: testAccTFERegistryModule_vcs(rInt),
+				Config: testAccTFERegistryModule_vcsWithTagsTrue(rInt),
 			},
 			{
 				ResourceName:        "tfe_registry_module.foobar",
@@ -390,7 +438,7 @@ func TestAccTFERegistryModuleImport_vcsPrivateRMRecommendedFormat(t *testing.T)
 		CheckDestroy: testAccCheckTFERegistryModuleDestroy,
 		Steps: []resource.TestStep{
 			{
-				Config: testAccTFERegistryModule_vcs(rInt),
+				Config: testAccTFERegistryModule_vcsWithTagsTrue(rInt),
 			},
 			{
 				ResourceName:        "tfe_registry_module.foobar",
@@ -461,6 +509,30 @@ func TestAccTFERegistryModuleImport_vcsPublishingMechanismBranchToTagsToBranch(t
 	})
 }
 
+func TestAccTFERegistryModule_branchOnlyEmpty(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config: testAccTFERegistryModule_branchOnlyEmpty(rInt),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "publishing_mechanism", "git_tag"),
+					resource.TestCheckNoResourceAttr("tfe_registry_module.foobar", "test_config.0"),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.tags", strconv.FormatBool(true)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.branch", ""),
+				),
+			},
+		},
+	})
+}
+
 func TestAccTFERegistryModuleImport_vcsPublishingMechanismBranchToTagsToBranchWithTests(t *testing.T) {
 	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
 
@@ -597,6 +669,25 @@ func TestAccTFERegistryModule_invalidTestConfigOnUpdate(t *testing.T) {
 	})
 }
 
+func TestAccTFERegistryModule_vcsTagsOnlyFalse(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config:      testAccTFERegistryModule_vcsTagsOnlyFalse(rInt),
+				ExpectError: regexp.MustCompile(`branch must be provided when tags is set to false`),
+			},
+		},
+	})
+}
+
 func TestAccTFERegistryModule_branchAndInvalidTagsOnCreate(t *testing.T) {
 	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
 
@@ -633,6 +724,25 @@ func TestAccTFERegistryModule_branchAndTagsEnabledOnCreate(t *testing.T) {
 	})
 }
 
+func TestAccTFERegistryModule_branchAndTagsDisabledOnCreate(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config:      testAccTFERegistryModule_vcsWithBranchAndTagsDisabled(rInt),
+				ExpectError: regexp.MustCompile(`tags must be set to true when no branch is provided`),
+			},
+		},
+	})
+}
+
 func TestAccTFERegistryModule_branchAndTagsEnabledOnUpdate(t *testing.T) {
 	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
 
@@ -660,6 +770,34 @@ func TestAccTFERegistryModule_branchAndTagsEnabledOnUpdate(t *testing.T) {
 	})
 }
 
+func TestAccTFERegistryModule_branchAndTagsDisabledOnUpdate(t *testing.T) {
+	skipUnlessBeta(t)
+	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
+
+	resource.Test(t, resource.TestCase{
+		PreCheck: func() {
+			testAccPreCheck(t)
+			testAccPreCheckTFERegistryModule(t)
+		},
+		Providers: testAccProviders,
+		Steps: []resource.TestStep{
+			{
+				Config: testAccTFERegistryModule_vcsTags(rInt),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "publishing_mechanism", "git_tag"),
+					resource.TestCheckNoResourceAttr("tfe_registry_module.foobar", "test_config.0.tests_enabled"),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.tags", strconv.FormatBool(true)),
+					resource.TestCheckResourceAttr("tfe_registry_module.foobar", "vcs_repo.0.branch", ""),
+				),
+			},
+			{
+				Config:      testAccTFERegistryModule_vcsWithBranchAndTagsDisabled(rInt),
+				ExpectError: regexp.MustCompile(`tags must be set to true when no branch is provided`),
+			},
+		},
+	})
+}
+
 func TestAccTFERegistryModuleImport_nonVCSPrivateRM(t *testing.T) {
 	rInt := rand.New(rand.NewSource(time.Now().UnixNano())).Int()
 
@@ -964,7 +1102,7 @@ func getRegistryModuleProvider() string {
 	return strings.SplitN(getRegistryModuleRepository(), "-", 3)[1]
 }
 
-func testAccTFERegistryModule_vcs(rInt int) string {
+func testAccTFERegistryModule_vcsWithTagsTrue(rInt int) string {
 	return fmt.Sprintf(`
 resource "tfe_organization" "foobar" {
  name  = "tst-terraform-%d"
@@ -1175,6 +1313,156 @@ resource "tfe_registry_module" "foobar" {
 		envGithubRegistryModuleIdentifer)
 }
 
+func testAccTFERegistryModule_vcsWithBranchAndTagsDisabled(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+   branch             = ""
+   tags				  = false
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
+
+func testAccTFERegistryModule_vcsBasic(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
+
+func testAccTFERegistryModule_vcsTagsOnlyFalse(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+   tags               = false
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
+
+func testAccTFERegistryModule_branchOnly(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+   branch 			  = "main"
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
+
+func testAccTFERegistryModule_branchOnlyEmpty(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+   branch 			  = ""
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
+
 func testAccTFERegistryModule_vcsTags(rInt int) string {
 	return fmt.Sprintf(`
 resource "tfe_organization" "foobar" {
@@ -1205,6 +1493,36 @@ resource "tfe_registry_module" "foobar" {
 		envGithubRegistryModuleIdentifer,
 		envGithubRegistryModuleIdentifer)
 }
+func testAccTFERegistryModule_vcsRepoWithFalseTags(rInt int) string {
+	return fmt.Sprintf(`
+resource "tfe_organization" "foobar" {
+ name  = "tst-terraform-%d"
+ email = "admin@company.com"
+}
+
+resource "tfe_oauth_client" "foobar" {
+ organization     = tfe_organization.foobar.name
+ api_url          = "https://api.github.com"
+ http_url         = "https://github.com"
+ oauth_token      = "%s"
+ service_provider = "github"
+}
+
+resource "tfe_registry_module" "foobar" {
+ organization     = tfe_organization.foobar.name
+ vcs_repo {
+   display_identifier = "%s"
+   identifier         = "%s"
+   oauth_token_id     = tfe_oauth_client.foobar.oauth_token_id
+	 branch             = "main"
+	 tags               = false
+ }
+}`,
+		rInt,
+		envGithubToken,
+		envGithubRegistryModuleIdentifer,
+		envGithubRegistryModuleIdentifer)
+}
 
 func testAccTFERegistryModule_GitHubApp(rInt int) string {
 	return fmt.Sprintf(`