Regarding the Murabaha Agreement

In 2007, at the initiative of Dubai Islamic Bank, Dar Al Sharia — a council of Sharia scholars and experts in Islamic law and finance — issued a fatwa on the murabaha transaction. We have decided to publish an Uzbek translation of this fatwa on our website, as the key rules outlined in it are highly relevant today and of great practical value for entrepreneurs:

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Furthermore, expenses incurred (by the customer) after the goods acquired under the Murabaha contract have been delivered to the customer are also not added to the Murabaha price.

From the "Fatwas" section

Topic: The issue of adding various expenses related to the delivery of goods to the customer to the cost of the product sold under Murabaha

Question:

An Islamic financial institution receives a request from its customer to add to the price of the product (equipment, machinery, etc.) financed through Murabaha the costs of loading, transportation, storage, delivery, customs duties, and other similar expenses. Sometimes these expenses are presented as part of the invoice, and sometimes as a separate invoice. At this point, the question arises as to whether such expenses can be financed under Murabaha.

Answer:

As is known, Murabaha is widely used by Islamic financial institutions as a financing product. In this arrangement, the Islamic financial institution adds its own markup to the price of the product and, having agreed upon this selling price with the customer, sells the product to the customer on a deferred payment basis (i.e., in installments over a specified period). Thus, the price of the product sold under a Murabaha contract consists of two components: the price of the product and the financial institution's markup (profit).

Formation of the product price:

All direct additional costs related to the purchase of the product (loading, transportation, storage, delivery, customs duties, various taxes, etc.) may be included in the price of the product. However, the important condition is that these expenses can be financed under the Murabaha transaction only after the selling price of the product being purchased for sale under the Murabaha contract (i.e., the price at which the financial institution acquires the product from the owner/seller) has been calculated.

If the financial institution has opened a letter of credit to purchase the product but has not yet signed a Murabaha contract with the customer, and the customer requests that expenses directly related to the product price be added, and provides the relevant supporting documents for these expenses, the financial institution may add these expenses to the price of the product.

However, if the price of the product has already been agreed upon in the Murabaha contract concluded between the financial institution and the customer, and the customer subsequently makes such a request, this request/desire shall not be fulfilled (i.e., additional expenses cannot be added to the product price in this case).

Similarly, if the opened letter of credit provides for the coverage of all types of direct expenses, even if various payments to the seller are to be made at different times (on different dates), the Murabaha transaction may only be executed after the submission of the relevant documents confirming all these expenses.

Source: islommoliyasi.uz