I was following a tutorial on In App Purchase which also shows how to test by using the sandbox environment. As I've tried to add an In App Purchase to my Application the iTunes Connect prompted following hint:
You do not have a contract in place for the price tier you selected. To make your app available on the App Store, you must have an active Paid Applications Contract.
Am I still able to test In App Purchase?
For adding and testing InApp purchase in your application you have to agreed on apple contract for paid application and provide your contact info , bank info, and tax info. You have to login in itunesconnect.apple.com and click on contract, tax and banking.
After providing above info you can see Manage In App Purchase Button on itunes connect web site and you can add your product.