Zakat on Raw Materials and Work-in-Progress

Short answer: All inventory intended for sale (raw materials, work-in-progress, and finished goods) is zakatable as part of trade goods (ʿurūḍ al-tijārah), provided the total value reaches the nisab and one lunar year (hawl) passes. The supplied hadith do not explicitly mention factory inventory, but general principles from them apply. Details: - Finished goods: They are clearly trade goods; zakat is due on their market value at the end of each year. - Raw materials: If purchased for production and subsequent sale, they are considered part of trade goods. Zakat is calculated on their current market value (as if sold) at year-end. - Work-in-progress: Half-finished items are valued at their market price in the current state (including material and labor costs) and added to the total zakatable inventory. - All assets are combined; if total value (after deducting debts) reaches nisab (equivalent to 85g of gold or 595g of silver), 2.5% zakat is payable. Evidence: 1. Sahih al-Bukhari 1404 (P10): The Prophet warned against hoarding gold and silver without paying zakat. This shows that any stored wealth (including inventory) is subject to zakat if hoarded for trade. 2. Sahih al-Bukhari 1459 (P11) and Sahih al-Bukhari 1405 (P12): The Prophet set minimum nisab for silver, camels, and dates. By analogy, trade goods have a nisab threshold (value of silver/gold). These hadith establish the principle of nisab for zakatable wealth. 3. Sahih al-Bukhari 1451 (P4): Joint property is combined for zakat. This indicates that all business assets should be aggregated when calculating zakat. Note: The supplied evidence does not directly address raw materials or WIP; the ruling is based on scholarly consensus (Ibn Baz, al-Uthaymin, Permanent Committee) using qiyas from these general hadith. For complex cases, consult a knowledgeable scholar.