Taking an increase on a loan
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Q1: In some service provision contracts between an airline and a ground services company operating at airports, whether inside or outside the Kingdom, it is usually stipulated in those contracts that any amounts the ground services company pays to a third party on behalf of the airline for any service provided to it, the airline must return those amounts to the ground services company with an addition of 10% of the amount paid, on the basis that it is compensation for administrative expenses, and sometimes it is explicitly called "Interest" in contracts concluded in English. Is this transaction permissible or not?
A1: What the ground services company pays on behalf of the airline is like a loan, so it is not permissible to take an increase on it; because the scholars have agreed on the prohibition of taking an increase on a loan.
A1: What the ground services company pays on behalf of the airline is like a loan, so it is not permissible to take an increase on it; because the scholars have agreed on the prohibition of taking an increase on a loan.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.