In the Bhutanese capital of Thimphu, a street vendor offering snacks and drinks is secretly selling cigarettes to two customers -- a transaction that could put him in jail for five years. In hushed tones, the young men ask for a packet of 10 and the contraband is handed over wrapped in paper and hastily shoved inside the large pouch at the front of their traditional tunics. "You can find them all over, but you need to know someone," one of the buyers said as he scuttled away. "It's dangerous though. He (the seller) could land in jail." Anyone in Bhutan selling tobacco or found with cigarettes that have not been declared to customs has committed a non-bailable offence that carries a maximum five-year prison sentence. Bhutan, an insular and isolated Himalayan kingdom sandwiched between India and China, brought in the strictest anti-smoking laws in the world this year in a bid to stub out the damaging habit. The sale of tobacco in Buddhist-majority Bhutan was already banned, as was smoking in public places, but the new law sought to crack down on smuggling by introducing a prison term for offenders. Known as the Tobacco Control Act, the legislation does not make smoking illegal, but it restricts smokers to private use of a maximum of 200 grams of tobacco and 200 cigarettes per month that can be legally imported. Users have to keep the customs receipts to prove that duties of up to 200 percent have been paid. In March, a 23-year-old monk became the first person convicted and sentenced to three years in prison after he was caught with just 2.50-dollars worth of undeclared chewing tobacco. Since then, more than 50 people have been arrested, including an 81-year-old man and a 16-year-old boy. "We are doing this for the good health and well-being of our people," explains Kinley Dorji, the executive director of the Bhutan Narcotic Control Agency, which has overseen the implementation of the law. "People in the world are full of habits and addictions and sometimes they are not easy to give up," he told AFP. But sending small-time users to jail, particularly those in apparent ignorance of the law, has caused an outcry and proved a test for Bhutan's fledgling democracy. "We don't question the good intention. Tobacco kills people, but smoking has been there for centuries. Overnight people cannot stop," says 39-year-old Tashi Gyeltshen, who has spearheaded protests on Facebook. "Everyone agrees that the prison term is a mistake," he told AFP. Parliamentary opposition leader Tshering Tobgay has also been a vociferous critic. Faced with hostile media coverage and public dissent -- unheard of in Bhutan during the days of absolute monarchy which came to an end in 2008 -- new guidelines have been brought in recommending fines for small-time users. Prime Minister Jigmi Thinley admitted to AFP in an interview that the law imposed "excessive punishment" on those caught in possession of small quantities of tobacco and this would be reviewed later this year. "I don't think we have the right balance," he said in his office. "I am hoping that we will be able to make amendments... The kind of punishment is something that I think needs to be looked at." The government argues, however, that the law will ease the tobacco-related burden on the country's free healthcare system and ultimately help users, many of whom confess to wanting to give up anyway. Supporters point to World Health Organisation data that show six million people die annually from tobacco, with 80 percent of those deaths in developing countries like Bhutan. So has the country famed for seeking "Gross National Happiness" for its citizens instead of pure economic development, been successful in restricting tobacco use? A survey in 2009 funded by international anti-tobacco groups found that just 2.8 percent of people smoked in Bhutan, compared to 31.4 percent in China. But after dark in the capital, Bhutanese of all ages can be found defying "No Smoking" signs in the back-street bars of the capital. Glowing red embers are a frequent sight down the alleyways leading from the main streets, and smokers can be seen indulging at nightclubs and at the city's only bowling alley. Most say they buy their cigarettes off black market vendors. "I can go anywhere and get cigarettes, but the cost has really gone up," says Gyeltshen, who jointly set up the "Amend the Tobacco Control Act" Facebook group which has more than 2,600 members. In some areas, however, the law appears to be having an effect. The Bhutan Today newspaper reported that construction companies have complained to the government because their Indian labourers are deserting because they can't live without tobacco. Dorji from the Bhutan Narcotic Control Agency says that his organisation, working with the police and customs, has been "very successful" in controlling tobacco use. "There may be a black market, but the fact is that it has been reduced a lot," he says. The agency's legal officer Sonam Tshering defends restricting a habit seen as "un-Bhutanese" in this fiercely proud country, but he admits they will never be able to completely stop contraband. "In Singapore, for example, they have the death sentence for drug trafficking, but there are still cases there. People still take the risk."