Is Zakat due on the packaging used in sales?
The question, as received
I have a food catering business. Is Zakat due on the packaging used? For example, food containers, carrier bags etc?
The answer
If one is billing and charging customers for packaging, the packaging will be a Zakatable business asset. If customers are not billed nor charged for the packaging, packaging will not be Zakatable[1].
Condition: Zakatable only if customers are charged for the packaging.
Explanation
If packaging is treated as an overhead expense and is not billed directly to the customers, the packaging will not be Zakatable. In such a scenario, it will be considered as though one gifts packaging and thus, it is not a Zakatable asset.
Fiqh basis
Goods purchased to resell become Zakatable business assets. Such assets are Zakatable. Therefore, packaging purchased to resell becomes Zakatable.
And Allah knows best.
Mufti Faraz Adam
References
1AAOIFI Shariah Standards (2015), Shariah Standard No.35 Zakat, Bahrain: AAOIFI
Based on the Hanafi school and on the question as it was asked. Another mufti may reach a different conclusion. Read the disclaimer.