I want to know about zakat on stock materials which is lying at our warehouse
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
I want to know about zakat on stock materials which is lying at our warehouse. At what price we should give Zakat for out stock materials, At our buying price from factory/market or at our selling price in market?
i.e. we did buy materials from factory/market at Rupees 20.00/kg on 14th Shabaan. Costing or other charges for deliver materials at our warehouse is Rupees 2.00/kg. It total come to us at Rupees 22.00/kg. Our Zakat date is 1st Ramdaan and materials is still lying in our warehouse on 1st Ramdaan. We sell this materials in market at Rupees 25/kg and our today (29th Shabaan) selling price is also 24/kg in market due to huge stock but we still not sold this materials (stock materials) and not got any profit and face any loss yet.
So, at what price (20/kg, 22/kg 24/kg or 25/kg) we should give Zakat?
I am waiting for your reply.
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The majority of the scholars and jurists in Islam are of the opinion that if the product or commodity is one of normal trade where the price of the product does not increase/decrease exponentially, then the zakah may be paid on the cost value of the items of trade.
But if the product or commodity is such where the price fluctuates or increases/decreases exponentially, like shares, investments in land, or antique pieces, etc., where when bought the cost might have been only a $100.00 but the market value today might be $100,000.00, then it would be closest to piety to fulfill ones zakah on the market value of the holdings.
Your Question: So, at what price (20/kg, 22/kg 24/kg or 25/kg) we
should give Zakat?
Since the products of your inventory seem to be goods of normal trade, if you paid the zakah on the cost value of your merchandise (ie 20/kg or 22/kg depending of how you determine the cost) it would suffice. And Allah Alone Knows Best.
Whatever written of Truth and benefit is only due to Allahs Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.
Your brother and well wisher in Islam,