Fatwa No : 85280
Is It Permissible to Charge a Higher Price in the Case of Selling on Installments?

Is It Permissible to Charge a Higher Price in the Case of Selling on Installments?

What do the honorable Muftis say regarding the following issue: I run an installment business in which the total cash price of a car is 178,000 rupees, whereas if the same car is sold on installments, then according to the market value, the situation is as follows: A party pays an advance amount of 80,000 rupees, and considering the advance amount, with mutual consent of both parties, the total price of the car becomes 240,000 rupees. After paying the advance, the remaining amount is to be paid either in 12 monthly installments of 13,333.33 rupees or in 15 monthly installments of 10,666.66 rupees. Is this business permissible? Based on the market value, the situation is as follows: Total price: 240,000 rupees, advance: 80,000 rupees, on 12-month plan: 13,333.33 rupees per installment, on 15-month plan: 10,666.66 rupees per installment.

الجوابُ حامِدا ًو مُصلیِّا ً

Charging a higher price in comparison to cash when selling on credit or installments is permissible in Shariah, and it does not fall under the category of interest (riba). However, in the case of an installment transaction, the following conditions must be observed in order for the transaction to be valid and permissible according to Shariah: (1) At the time of the contract session, it must be clearly decided that the transaction is on credit/instalments. (2) The value of each installment must be determined. (3) It must also be agreed upon how many installments there will be in total. (4) No penalty or extra charge should be stipulated for late payment of any installment. Therefore, by observing these conditions, purchasing on installments is undoubtedly permissible.

مأخَذُ الفَتوی

کما فی مجلة الاحکام العدلیة: (الْمَادَّةُ 245) الْبَيْعُ مَعَ تَأْجِيلِ الثَّمَنِ وَتَقْسِيطِهِ صَحِيحٌ (الْمَادَّةُ 246) يَلْزَمُ أَنْ تَكُونَ الْمُدَّةُ مَعْلُومَةً فِي الْبَيْعِ بِالتَّأْجِيلِ وَالتَّقْسِيطِ (ص:50)۔
و فی البسوط للسرخسی: وإذا عقد العقد على أنه إلى أجل كذا بكذا وبالنقد بكذا أو قال إلى شهر بكذا أو إلى شهرين بكذا فهو فاسد؛(الی قولہ) وهذا إذا افترقا على هذا فإن كان يتراضيان بينهما ولم يتفرقا حتى قاطعه على ثمن معلوم، وأتما العقد عليه فهو جائز الخ (13/8)۔
و فی الدرالمختار: (وصح بثمن حال) وھو الأصل (ومؤجل الی معلوم) لئلا یفضی الی النزاع الخ (4/531)۔