ngultrums from India without declaring it to customs in the Himalayan kingdom.
Bhutan banned the sale of cigarettes in 2005 and tightened up its law last year to combat smuggling, requiring consumers to provide valid customs receipts for any tobacco products.
A judgement from a district court in the capital Thimphu, posted on the website of opposition lawmaker Tshering Tobgay, said the monk had violated the Tobacco Control Act because he had not paid duty for the tobacco.
"I should be punished, but the penalty could have been lighter, as I wasn't aware about the act," a tearful 23-year-old Tshering, who was arrested in January, told the Kuensel newspaper.
"I didn't even conceal it while I was coming up from Phuentsholing," he said, referring to a border town between Bhutan and India.
"If police would've checked at that point, I might not have landed in jail today."
Smokers are restricted to 200 cigarettes or 150 grams of other tobacco products a month that can be legally imported, with tariffs of 100% from India or 200% from elsewhere, the reports said.
Tshering, who was carrying 480 grams of tobacco, plans to appeal to the high court, lawmaker Tobgay said. After defending himself in the lower court, the monk will now employ a lawyer.
"The objectives (of the law) are beyond question. They are very good," said the president of the People's Democratic Party, who voted against the law last year and wants lawmakers to consider watering it down.
"To be sentenced for three years with no bail is pretty severe," said the non-smoker, who says the use of tobacco is rare in Bhutan.
The highly traditional Buddhist country of 700,000 people became the first in the world to ban the sale of tobacco amid concern in the government that young people were increasingly taking up the habit.
A Facebook group, counting more than 200 people, has been set up in support of Tshering called "Amend the Tobacco Control Act."
"I am sure that every smoker here has bought an illegal cigarette," one member, Dipika Chhetri, posted. "I wonder if the government knows exactly how many criminals there are now in Bhutan."
Tobgay said he had spoken to Tshering, one of six children from a farming family in western Bhutan, who was "obviously very concerned."
Another person, a married 24-year-old truck driver called Lhab Tshering, is also likely to be jailed after being found guilty for smuggling 68 packets of chewing tobacco, Tobgay said.
Bhutan, famed for its invention of Gross National Happiness to measure progress and its citizens' well-being, is one of the most remote and reclusive places on Earth, sandwiched between India and China.
It had no roads or currency until the 1960s, allowed television only in 1999 and continues to resist the temptation of allowing mass tourism -- preferring instead to allow access to only small organised groups of well-heeled visitors.
The country changed from an absolute monarchy to a constitutional monarchy in 2008 when Bhutan adopted a constitution and held its first parliamentary elections.
Bhavna Mukhopadhyay, executive director of anti-tobacco group the Voluntary Health Association of India, said her group advocates "making smoking as difficult as possible" rather than locking people up.
"On one hand, we have the extreme case in India where the tobacco industries are completely unregulated," she said.
"On the other hand, you have Bhutan, where you can't sell tobacco but where there is a lot of underground smuggling."