Zakaat On Jewellery, Gold And Silver Stock-In-Trade And Retail Price Masaa’il

1) Zakaat of a female’s jewellery: Zakaat on the gold/silver jewellery which a woman has procured for her own use is on the current market value of the gold/silver content of the jewellery. By ‘current’ value is meant the price she would pay for the weight of gold/silver content of her jewellery.

If for example, her gold jewellery together with the precious stones encrusted therein weighs 20 ounces, and the weight of the stones is 4 ounces, she has to pay Zakaat on 16 ounces of gold/silver. Her Zakaat is not calculated on the current value of the manufactured jewellery items. Zakaat is on the weight of the gold/silver.

2) Zakaat on the gold/silver stock-in-trade: A jeweller/trader has to pay Zakaat on the current wholesale price of the finished items, not only on the weight of the gold/silver. Since the jewellery for him is stock-in-trade, the same principle which regulates all his merchandise will govern his gold/silver jewellery. ‘Current’ price relative to the trader is the price that he will pay if he purchases the jewellery today from a wholesaler or it will be the final cost of the manufactured items if he himself designs and makes up the jewellery from gold/silver.

3) Zakaat on the retail price: A trader does not have to pay Zakaat on his retail prices or the price he will be selling the articles. His ‘mark up’ is a fictitious, non-existent entity. It is not Maal (stock/tangible wealth) in his possession. The profit which he intends making pertains to the future. Currently it does not exist anywhere. He does not have possession of the phantom which is in fact future imaginary profit.

For example, if he has a price tag of R100 on an item, and he changes the R100 and writes R200 or R1,000, he does not have to pay Zakaat on this huge written increase because it is simply not Zakaat taxable Maal (tangible assets) in his possession. Zakaat becomes payable on the imaginary sum only after the fiction has been transformed into reality – into tangible Zakaat assets.