Is it permissible to sell a commodity by installments, and then the buyer sells it for cash to a third party?
The issue of Tawarruq is selling a commodity for a deferred price in order to obtain cash. The majority of scholars deem it permissible because it is a sale and not usury. The Permanent Committee and Sheikh Ibn Baz have chosen to permit it for the sake of facilitation and fulfilling needs. Sheikh Ibn Taymiyyah considers it prohibited. Sheikh Ibn Uthaymeen took a middle ground, stating its permissibility with conditions: the need for money, the absence of a permissible alternative like a loan, the contract being free from anything resembling usury, and not selling the commodity before possessing and acquiring it. It is also stipulated that the buyer must not sell it back to the seller for less than what he bought it for.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- 18016
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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