An Australian man in Indonesia faces up to 12 years in jail if convicted of possessing methamphetamine.

The trial of Troy Andrew Smith, from Port Lincoln in South Australia, began in a Bali court on Thursday.

Local authorities said Mr Smith was arrested in April after police raided his hotel near Kuta beach.

Police allege they seized 3.15 grams of crystal methamphetamine from his room.

The arrest followed a tip that he had received a suspicious package containing toothpaste by mail from Australia.

Prosecutors at the District Court in Denpasar, Bali's provincial capital, said he violated illicit drug laws that carry a penalty of up to 12 years in prison and a fine of 8 billion rupiah ($742,272).

Authorities reduced the initial charge of drug trafficking — which carries a possible death penalty — to the less serious charge of drug use, after a police drug assessment team determined he was a drug user.

Lead prosecutor Isa Ulinnuha said the 49-year-old accountant confessed to using drugs since 2020 to stop drinking alcohol, and denied being a dealer.

"Therefore, we also recommend that he undergo a psychological evaluation and inpatient medical rehabilitation for at least six months in a government rehabilitation facility."

After the charges against Mr Smith were read, the panel of three judges adjourned the trial until June 20.

His lawyer, Ida Bagus Gumilang Galih Sakti, said he would seek to prove that his client is a user, not a trafficker, and has no connection with any drug network.

He said his client is nervous and depressed as he faces trial.

Indonesia has very strict drug laws and convicted traffickers can be executed by a firing squad.

More than 150 people are on death row, mostly for drug crimes, and about a third of them are foreigners.

Eighteen people convicted of drug-related offenses have been executed under current President Joko Widodo, who took office in 2014.

AP/ABC