Shariah on Direct and Indirect Cost in Murabahah

Abstract: Murabahah contract is an unconditional contract of sale between the seller and
buyer, where the goods, cost price, markup and payment date are clearly defined, agreed and
documented. The important element is that the price in murabahah should be mutually agreed
upon based on the cost and margin. This paper aims to discuss the above costs (direct and
indirect) from shariah point of view and recommend the opinion which can be applied in modern
murabahah transaction. This paper is a concept paper where the data from the views of shariah
was gathered regarding to cost used in trading and comparison with the conventional financial
cost has been made to show the direct and indirect cost in murabahah financing is accepted on
unaccepted by the Shariah. The study found that the direct and indirect cost in murabahah
financing is accepted by the Shariah, however it is only recommended for the cost which
contributes to the product