"We did not allow this issue to be distributed in Sri Lanka because we felt it could hurt the religious sentiments of the people," said Customs department spokesman Leslie Gamini.
"Customs at the Bandaranaike international airport seized 4,000 copies of the Time magazine as its cover was carrying a statement which could have hurt religious sentiments," he added.
The cover story on the July 1 issue of the magazine captioned 'The Face of Buddhist Terror' features Myanmar's Monk A Wirathu, who leads the 969 Buddhist Nationalist movement against the Muslims.
Sri Lanka's own Buddhist extremist groups have made news in the recent months with Bodu Bala Sen leading a campaign of Muslim hatred in the island nation.