diff --git a/modules/terraform/apply_test.go b/modules/terraform/apply_test.go
index 56c12c95d..2cabcfe8a 100644
--- a/modules/terraform/apply_test.go
+++ b/modules/terraform/apply_test.go
@@ -1,6 +1,7 @@
 package terraform
 
 import (
+	"path/filepath"
 	"testing"
 	"time"
 
@@ -201,3 +202,28 @@ func TestTgApplyUseLockNoError(t *testing.T) {
 	// make sure -lock CLI option is passed down correctly
 	require.Contains(t, out, "-lock=true")
 }
+
+func TestApplyWithPlanFile(t *testing.T) {
+	t.Parallel()
+
+	testFolder, err := files.CopyTerraformFolderToTemp("../../test/fixtures/terraform-basic-configuration", t.Name())
+	require.NoError(t, err)
+	planFilePath := filepath.Join(testFolder, "plan.out")
+
+	options := &Options{
+		TerraformDir: testFolder,
+		Vars: map[string]interface{}{
+			"cnt": 1,
+		},
+		NoColor:      true,
+		PlanFilePath: planFilePath,
+	}
+	_, err = InitAndPlanE(t, options)
+	require.NoError(t, err)
+	require.FileExists(t, planFilePath, "Plan file was not saved to expected location:", planFilePath)
+
+	out, err := ApplyE(t, options)
+	require.NoError(t, err)
+	require.Contains(t, out, "1 added, 0 changed, 0 destroyed.")
+	require.NotRegexp(t, `\[\d*m`, out, "Output should not contain color escape codes")
+}
diff --git a/modules/terraform/cmd.go b/modules/terraform/cmd.go
index b4725927c..3591c083a 100644
--- a/modules/terraform/cmd.go
+++ b/modules/terraform/cmd.go
@@ -32,10 +32,6 @@ var commandsWithParallelism = []string{
 
 // GetCommonOptions extracts commons terraform options
 func GetCommonOptions(options *Options, args ...string) (*Options, []string) {
-	if options.NoColor && !collections.ListContains(args, "-no-color") {
-		args = append(args, "-no-color")
-	}
-
 	if options.TerraformBinary == "" {
 		options.TerraformBinary = "terraform"
 	}
diff --git a/modules/terraform/format.go b/modules/terraform/format.go
index a04b1df50..4edd1b16d 100644
--- a/modules/terraform/format.go
+++ b/modules/terraform/format.go
@@ -50,11 +50,22 @@ func FormatArgs(options *Options, args ...string) []string {
 	lockSupported := collections.ListContains(TerraformCommandsWithLockSupport, commandType)
 	planFileSupported := collections.ListContains(TerraformCommandsWithPlanFileSupport, commandType)
 
+	// Include -var and -var-file flags unless we're running 'apply' with a plan file
+	includeVars := !(commandType == "apply" && len(options.PlanFilePath) > 0)
+
 	terraformArgs = append(terraformArgs, args...)
-	terraformArgs = append(terraformArgs, FormatTerraformVarsAsArgs(options.Vars)...)
-	terraformArgs = append(terraformArgs, FormatTerraformArgs("-var-file", options.VarFiles)...)
+
+	if includeVars {
+		terraformArgs = append(terraformArgs, FormatTerraformVarsAsArgs(options.Vars)...)
+		terraformArgs = append(terraformArgs, FormatTerraformArgs("-var-file", options.VarFiles)...)
+	}
+
 	terraformArgs = append(terraformArgs, FormatTerraformArgs("-target", options.Targets)...)
 
+	if options.NoColor {
+		terraformArgs = append(terraformArgs, "-no-color")
+	}
+
 	if lockSupported {
 		// If command supports locking, handle lock arguments
 		terraformArgs = append(terraformArgs, FormatTerraformLockAsArgs(options.Lock, options.LockTimeout)...)