Tutorial Question: Compare & contrast Bay at-Tawarruq vs Bayal-Inah

NO FACTORS BAY AT-TAWARRUQ BAYAL-INAH

1



Definition / Concept

- Buying a commodity for a deferred
payment
- selling it to another person other
than the original seller at a lower
price for immediate payment


- Purchase a commodity on a deferred
payment basis
- Then, it is sold for cash, at a price
lower than the purchase price, back
to the original seller

2

Purpose


To facilitate cash and liquidity shortage

3

Parties


3 parties (at least)

2 parties

4

Subject Matter


Transferred & possessed by the third
party


Return back to the original seller





5





Legality

- Disputable
- Differences of opinions by the Muslim Scholars


-Majority scholars including Shafiis,
Hanafis & Imam Abu Hanifah prove
that that tawarruq is PERMITTED
Al BAQARAH 2:275


-Majority scholars: NOT PERMISSIBLE
-a legal device (hilah) to facilitate riba

- Malikis & Hanbalis: Void

-Second opinion including Imam
Ahmad: DISAPPROVED as by relating
it to bayal-inah, both considered as
bridge to riba

-Hanafis: if involved 2 parties-FASID;
exception for contract of 3 parties in
which the third party act as an
intermediary
- Minority: ALLOWED
-Shafiis & Zahiris: VALID-fulfills the
requirement of a valid sale






BAY AT-TAWARRUQ
1.








2.









3. Commodity-Murabahah Tawarruq











Customer
Bank
Developer
buy
sale
Customer
Bank
Developer
Customer
Bank
Broker 1
Broker 2

BAY AL-INAH










Prepared by:
Siti Nursyahira Nabia Shamsuddin
Nur Fazreen Hazrina Rahim
Nurul Akrimi Shukri
CUSTOMER
BANK
Sell ( at cost )
Sell ( Cost+Profit )