I have never had a problem submitting a non Newsstand App with Auto-Renewable Subscriptions. But I just started seeing this error when I try to submit app for review:
Free and Auto-Renewable In-App Purchase subscriptions are only available for apps with Newsstand enabled. Remove this In-App Purchase before you disable Newsstand.
Anyway to get around this error without delete "Auto-Renewable In-App Purchase subscriptions" ?
I just was on the phone with apple developer support. They said that this is a known issue with itunes connect and they are hoping to resolve it by the middle of today. (we are having the exact same issue with an application that is already in store with recurring purchases; we are currently unable to update the app because of this error)
EDIT: Issue is resolved for me
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