Stewards decided the Ferrari driver was "predominantly" responsible for a collision that caused Mercedes driver Nico Rosberg to spin and drop back.
Vettel has also been given two penalty points on his licence for the incident.
The four-time champion felt the clash was a "racing incident" but stewards said he had made a "small error".
The decision was made even though the stewards accepted Vettel's explanation he had not been going excessively fast.
They ruled that "although the cars involved in the incident were all going at relatively similar speed" Vettel should be punished because he had caused Rosberg to "lose multiple positions".
The Japanese Grand Prix takes place next Sunday at the Suzuka Circuit, 30 miles from Japan's third-largest city, Nagoya.
Vettel had been trying to overtake Red Bull's Max Verstappen, who used an expletive in calling the German "crazy", adding: "He smashed into Rosberg like an idiot."
After the race, Verstappen said: "I braked late but I was still behind Nico, and then Sebastian just dived up the inside, just went really deep and there was definitely no space for that and he T-boned Nico."
Rosberg said: "Oh, I just got T-boned by a four-time world champion out of control!"
Vettel said: "If anything I was braking the same point as him [Verstappen]. I was going side by side, he was squeezing me down to the inside. It's racing.
"I think both of us will make the corner, not a problem. Obviously Nico decided to take a different line, he's ahead, he's got nothing to do with it and doesn't have to bother what people are doing behind.
"I think there are two things that are wrong. First that Nico, without any blame, gets turned around. And second that I'm standing here and the race is still going on."
"Racing him is moving around, everybody knows by now," Vettel said.
"If you get squeezed to the inside your angle doesn't get any better for Turn One, and then it was, I don't know the word, it was quite bad, the angle.
"I was trying to do everything to turn and get the corner. I do get the corner no problem, I'm not braking too late. Nico obviously tries to cut back, I guess to fight Lewis. At that point we made contact."
Sebastian Vettel has been given a three-place grid penalty at the Japanese Grand Prix for causing a first-corner crash in Malaysia.