diff --git a/ledger/ledger-on-memory/BUILD.bazel b/ledger/ledger-on-memory/BUILD.bazel
index efcb56c2148d..ff8e080e6f85 100644
--- a/ledger/ledger-on-memory/BUILD.bazel
+++ b/ledger/ledger-on-memory/BUILD.bazel
@@ -173,6 +173,7 @@ conformance_test(
     ],
     test_tool_args = [
         "--verbose",
+        "--exclude=CommandDeduplicationIT",
         "--exclude=ConfigManagementServiceIT",
     ],
 )
diff --git a/ledger/participant-state/kvutils/src/main/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumption.scala b/ledger/participant-state/kvutils/src/main/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumption.scala
index 7dc009dd6951..9b6fe3152613 100644
--- a/ledger/participant-state/kvutils/src/main/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumption.scala
+++ b/ledger/participant-state/kvutils/src/main/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumption.scala
@@ -325,8 +325,27 @@ object KeyValueConsumption {
 
     val wrappedLogEntry = outOfTimeBoundsEntry.getEntry
     wrappedLogEntry.getPayloadCase match {
+      case DamlLogEntry.PayloadCase.TRANSACTION_REJECTION_ENTRY if deduplicated =>
+        val transactionRejectionEntry = wrappedLogEntry.getTransactionRejectionEntry
+        Some(
+          Update.CommandRejected(
+            recordTime = recordTime,
+            completionInfo = parseCompletionInfo(
+              Conversions.parseInstant(recordTime),
+              transactionRejectionEntry.getSubmitterInfo,
+            ),
+            reasonTemplate = FinalReason(
+              Status.of(
+                Code.ALREADY_EXISTS.value,
+                "Duplicate commands",
+                Seq.empty,
+              )
+            ),
+          )
+        )
+
       case _ if deduplicated =>
-        // We don't emit updates for deduplicated submissions.
+        // We only emit updates for duplicate transaction submissions.
         None
 
       case DamlLogEntry.PayloadCase.TRANSACTION_REJECTION_ENTRY if invalidRecordTime =>
diff --git a/ledger/participant-state/kvutils/src/test/lib/scala/com/daml/ledger/participant/state/kvutils/ParticipantStateIntegrationSpecBase.scala b/ledger/participant-state/kvutils/src/test/lib/scala/com/daml/ledger/participant/state/kvutils/ParticipantStateIntegrationSpecBase.scala
index 4f5abd04c5e6..fb5038c867ad 100644
--- a/ledger/participant-state/kvutils/src/test/lib/scala/com/daml/ledger/participant/state/kvutils/ParticipantStateIntegrationSpecBase.scala
+++ b/ledger/participant-state/kvutils/src/test/lib/scala/com/daml/ledger/participant/state/kvutils/ParticipantStateIntegrationSpecBase.scala
@@ -322,7 +322,7 @@ abstract class ParticipantStateIntegrationSpecBase(implementationName: String)(i
         }
       }
 
-      "reject duplicate commands" ignore participantState.use { ps =>
+      "reject duplicate commands" in participantState.use { ps =>
         val firstCommandId = "X1"
         val secondCommandId = "X2"
         for {
@@ -337,7 +337,7 @@ abstract class ParticipantStateIntegrationSpecBase(implementationName: String)(i
             )
             .toScala
           (offset2, update2) <- waitForNextUpdate(ps, Some(offset1))
-          // Below submission is a duplicate, should get dropped.
+          // Below submission is a duplicate.
           result3 <- ps
             .submitTransaction(
               submitterInfo(alice, firstCommandId),
@@ -346,6 +346,7 @@ abstract class ParticipantStateIntegrationSpecBase(implementationName: String)(i
               DefaultInterpretationCost,
             )
             .toScala
+          (offset3, update3) <- waitForNextUpdate(ps, Some(offset2))
           result4 <- ps
             .submitTransaction(
               submitterInfo(alice, secondCommandId),
@@ -354,10 +355,10 @@ abstract class ParticipantStateIntegrationSpecBase(implementationName: String)(i
               DefaultInterpretationCost,
             )
             .toScala
-          (offset3, update3) <- waitForNextUpdate(ps, Some(offset2))
+          (offset4, update4) <- waitForNextUpdate(ps, Some(offset3))
           results = Seq(result1, result2, result3, result4)
           _ = all(results) should be(SubmissionResult.Acknowledged)
-          updates = Seq(update1, update2, update3)
+          updates = Seq(update1, update2, update3, update4)
         } yield {
           all(updates.map(_.recordTime)) should be >= rt
 
@@ -367,8 +368,13 @@ abstract class ParticipantStateIntegrationSpecBase(implementationName: String)(i
           offset2 should be(toOffset(2))
           matchTransaction(update2, firstCommandId)
 
-          offset3 should be(toOffset(4))
-          matchTransaction(update3, secondCommandId)
+          offset3 should be(toOffset(3))
+          inside(update3) { case CommandRejected(_, _, FinalReason(status)) =>
+            status.code should be(Code.ALREADY_EXISTS.value)
+          }
+
+          offset4 should be(toOffset(4))
+          matchTransaction(update4, secondCommandId)
         }
       }
 
diff --git a/ledger/participant-state/kvutils/src/test/suite/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumptionSpec.scala b/ledger/participant-state/kvutils/src/test/suite/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumptionSpec.scala
index a626ded024fb..ee6061d2f767 100644
--- a/ledger/participant-state/kvutils/src/test/suite/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumptionSpec.scala
+++ b/ledger/participant-state/kvutils/src/test/suite/scala/com/daml/ledger/participant/state/kvutils/KeyValueConsumptionSpec.scala
@@ -16,10 +16,12 @@ import com.daml.ledger.participant.state.kvutils.KeyValueConsumption.{
 }
 import com.daml.ledger.participant.state.kvutils.api.LedgerReader
 import com.daml.ledger.participant.state.v2.Update
+import com.daml.ledger.participant.state.v2.Update.CommandRejected
 import com.daml.ledger.participant.state.v2.Update.CommandRejected.FinalReason
 import com.daml.lf.data.Time.Timestamp
 import com.google.protobuf.{ByteString, Empty}
 import com.google.rpc.code.Code
+import org.scalatest.Inside.inside
 import org.scalatest.matchers.should.Matchers
 import org.scalatest.prop.TableDrivenPropertyChecks._
 import org.scalatest.prop.TableFor4
@@ -85,13 +87,26 @@ class KeyValueConsumptionSpec extends AnyWordSpec with Matchers {
   )
 
   "outOfTimeBoundsEntryToUpdate" should {
-    "not generate an update for deduplicated entries" in {
+    "generate update only for rejected and deduplicated transaction" in {
       val testCases = Table(
         ("Time Bounds", "Record Time", "Log Entry Type", "Assertions"),
         (
           TimeBounds(deduplicateUntil = Some(aRecordTime)),
           aRecordTime,
           TRANSACTION_REJECTION_ENTRY,
+          Assertions(update =>
+            inside(update) { case Some(CommandRejected(_, _, FinalReason(status))) =>
+              status.code shouldBe Code.ALREADY_EXISTS.value
+              ()
+            }
+          ),
+        ),
+        (
+          TimeBounds(
+            deduplicateUntil = Some(Timestamp.assertFromInstant(aRecordTimeInstant.minusMillis(1)))
+          ),
+          aRecordTime,
+          TRANSACTION_REJECTION_ENTRY,
           Assertions(),
         ),
         (