Abu Dawud

Benefits and Issues:
The Noble Prophet (sallallahu alayhi wa sallam), despite being the leader and chief of the entire Islamic Ummah and indeed all of humanity, is presenting himself as a treasurer on behalf of Allah.
So this means that the resources of the state are not the property of the rulers.
They are not autonomous in spending them.
Rather, all participants, that is, all servants (of Allah), have a right in them.
And everyone should have an equal opportunity to benefit from them accordingly.
In fact, those who are destitute and needy—
They should receive more.
However, after the era of the Rightly Guided Caliphate (khilafah rashidah), during the monarchy, the rulers became increasingly autonomous in the use of the Muslims’ resources and began to consider the treasury as their own mother’s milk (i.e., something to be consumed freely).
And whenever they gave something to someone, it was not on the basis of entitlement, but rather due to loyalty to themselves and similar reasons; this is tantamount to betrayal.
And it is a violation of the commands of the Messenger of Allah (sallallahu alayhi wa sallam).

Hadith Commentary:
This refers to the spoils of war, indicating that their distribution, according to the command of Allah, is my responsibility. The true Giver is Allah the Exalted alone. Therefore, whatever a person receives, he should accept it wholeheartedly, and whatever is given will be exactly in accordance with his rightful share.

Hadith Commentary:
➊
The meaning of this hadith is that the One who gives and withholds is only Allah Ta'ala; the Messenger of Allah (sallallahu alayhi wa sallam) would act according to whatever command he received.

➋
In this hadith, the Messenger of Allah (sallallahu alayhi wa sallam) indicated towards the spoils of war (amwal ghaneemat), that their distribution is a divine command, i.e., my task is according to the command of Allah. The Giver is Allah Ta'ala, therefore, whoever receives whatever should accept it gladly, and whatever is given, the Messenger of Allah (sallallahu alayhi wa sallam) has no personal involvement in it; rather, it will be exactly in accordance with the right granted by Allah Ta'ala.

➌
Imam Bukhari (rahimahullah) has proven from this hadith that the Messenger of Allah (sallallahu alayhi wa sallam) was not the owner of the khums wealth (mal khums), rather, he was only the distributor (qasim), and the distribution too was according to the divine command.

Explanation of the Hadith:

This hadith pertains specifically to the issue of khums (one-fifth share) and, in general, to all commands and prohibitions in Islam. That is, the Messenger of Allah (sallallahu alayhi wa sallam) had no authority to dispose of or prohibit anything on his own accord; rather, the Messenger of Allah (sallallahu alayhi wa sallam) would only grant or prohibit that which was commanded by Allah, the Mighty and Majestic. For it is He alone who is the owner of all wealth and authority and the disposer of all affairs; He alone is the absolute giver and withholder, and the blessed person of the Messenger of Allah (sallallahu alayhi wa sallam) is like a treasurer, who implements the commands revealed by Allah Ta’ala. Now, whether someone receives little or in abundance, both are to be attributed to the command of Allah.

Furthermore, all the scholars are agreed that until the command regarding the distribution of war booty (ghanimah) and khums (one-fifth, which is the portion of wealth set aside for Allah and His Messenger sallallahu alayhi wa sallam) was revealed by Allah the Exalted, the Messenger of Allah (sallallahu alayhi wa sallam) used to distribute the war booty according to his own ijtihad (independent reasoning).

Moreover, Allah the Exalted has explained the matter of war booty and khums in a very comprehensive manner. Thus, the Divine statement is:

«وَاعْلَمُوا أَنَّمَا غَنِمْتُم مِّن شَيْءٍ فَأَنَّ لِلَّـهِ خُمُسَهُ وَلِلرَّسُولِ وَلِذِي الْقُرْبَىٰ وَالْيَتَامَىٰ وَالْمَسَاكِينِ وَابْنِ السَّبِيلِ» [الانفال: 41]

“And know that whatever you obtain as spoils of war, then indeed, one-fifth of it is for Allah and the Messenger and for [his] near relatives and the orphans, the needy, and the traveler.”

Difference between War Booty (Ghanimah) and Fay’:

It is necessary to understand here what the difference is between ghanimah and fay’.

Ghanimah: This refers to the wealth that comes into the hands of Muslims after fighting with the disbelievers.

«فئي: » This refers to the wealth that comes into the hands of Muslims from the disbelievers without fighting.

From this blessed verse, it is clear that war booty (ghanimah) is to be divided into five parts, one of which is to be set aside for Allah, His Messenger (sallallahu alayhi wa sallam), the relatives of the Messenger (sallallahu alayhi wa sallam), the needy, the orphans, and the travelers. The remaining four parts are to be distributed with complete justice and fairness among those fighters who participated in the battle.

The manner of distributing this wealth will be exactly as the Messenger of Allah (sallallahu alayhi wa sallam) prescribed at the time of the Battle of Khaybar: that is, the foot soldier receives one share, and the cavalryman receives three shares—one for himself and two for his horse.

Allamah Ibn al-Qayyim rahimahullah writes:

“The Messenger of Allah (sallallahu alayhi wa sallam), after the battle was over, would order all types of war booty to be gathered, and if any fighter had seized something from a disbeliever, it would be entrusted to him. Then, from this wealth, one-fifth would be set aside and spent on his relatives, orphans, the needy, and needy travelers. After that, whatever wealth remained would be spent on the general welfare of Islam and the Muslims. Then, a portion of the remaining wealth would be given to those women, children, and slaves who had no share in the war booty. Finally, the rest of the wealth would be distributed equally and justly among all the Muslim fighters who participated in the battle.” [زاد المعاد]

After the Messenger of Allah (sallallahu alayhi wa sallam) departed from this world, Sayyiduna Abu Bakr and Umar (radi Allahu anhuma) used to spend his and his close relatives’ share on the needs and preparations for jihad. Regarding this, the opinion of Sayyiduna Abu Bakr, Ali, and Qatadah (radi Allahu anhum) and others was the same. Whereas Imam Malik and most of the righteous predecessors held the view that the share of the Messenger of Allah (sallallahu alayhi wa sallam) from the war booty should be entrusted to the ruler of the time, so that he may spend it with honesty on the general welfare of Islam and the Muslims. Imam Ibn Taymiyyah rahimahullah also considered this opinion to be the strongest. Furthermore, Imam al-Nasa’i rahimahullah has narrated from Ubadah ibn al-Samit (radi Allahu anhu) a narration that to some extent supports this view, in which the Messenger of Allah (sallallahu alayhi wa sallam) said: “The khums (one-fifth share) from the war booty is for me, but (even that) will be spent on you.” [تيسير الرحمن: 532/1]